There are 2 general approaches to account for reimbursable expenses when using QuickBooks:
- Record the amount your vendor bills you in an expense account and the amount you invoice the customer or client in an income account. In this case, an income item is entered on the invoice.
- Record the amount your vendor bills you in an expense account and the amount you invoice the customer or client as an offset to this same expense account. If you do not use items, only the description and amount appears on the invoice.
For method #2, if you look at a typical QuickBooks invoice that has reimbursed expenses, there is no item listed, only a description of the expense. In this case, there is no account indicated for FinJinni to post the expense to. Instead, FinJinni temporarily puts the money into unallocated income and examines the account reports for the end of each day. The appropriate posting are made to move the expense into the correct account. You will see these postings on a GL detail report with a REF # value “Expense Reimbursement” or “Balancing Adjustment”.