How to categorize business purchases that is forwarded to client
valeriem
Member Posts: 7
What is the best way to categorize and keep track of payments made on behalf of a client?
I am a web designer and I bill my clients each year the hosting renewal fee is issued by the hosting company I purchase from. I bill the client for this fee so therefore am reimbursed.
It doesn't seem like it is technically an expense since I get paid back for the purchase. How do I categorize and properly enter this type of transaction?
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Comments
@valeriem,
The amounts you receive from your clients even if they are passed on costs are still income to you. Any amounts received would be sales and the vendor you pay would be whatever you think the appropriate expense name should be. Some examples could be Client Costs, Computer and Technology, Dues and Subscriptions etc. The expenses still belong to the business even if they are passed on to a client.