Claim reimbursable expenses on an invoice
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Claim reimbursable expenses on an invoice
A reimbursable expense is a cost you incur on behalf of a customer. Travel expenses and special materials or supplies are examples of common reimbursable expenses. When you bill your client, includ...
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when I am in the invoice and add a product service line, I can go to the reimbursed expenses account and select it, but then it does not show up on the product and service line. that section stays blank. I have to write in "reimbursed expense" and then it shows up as a permanent "product and service" line.
I am doing an invoice right now, and when I do it just as you say, above, "When you add the reimbursable expense line, be sure to click Edit Income Account, and select the Reimbursable Expenses account we created in Step 2. You can include the specific details of your reimbursable expense in the product description" there is nothing in that box, it just has a red outline that says "enter the item name".
This appears to work as explained, and will solve my problem with travel expenses. I was hoping to be able to do it through receipts, however, since that way you can capture an image of the expense item. And you can capture the image right when it happens, on your phone. Not possible to do that with Add Expense from Accounting > Transactions. Nonetheless, this appears to work.
This is exactly what I was looking for for my travel expenses, however is there a way of backdating it as I have been doing this wrong for a long time
@Harmony Technically it's possible but I'd be cautious about doing that, particularly for invoices that have already been paid. In order to balance your books, you'll need a corresponding income transaction to offset the expense. Check out the article linked above for more information.
Ok how do I solve the following
I pay for items for my client on say 10th of a month,
I then create and invoice for this expense on that date
My client reimburses me on 13th then I have a payment receipt I can set off against the invoice created but the original cost is still imported from my bank account. Happy to send screenshots of what I am talking about if that helps and sorry if I am being dim here
Hi @IainWood999. Technically speaking here, you are offsetting the cost by creating the invoice and billing your client already. You will want to show that you paid for an expense that was related to your business (for your client) but later, reimbursed that amount from the client (via invoice). To me, the original cost + the invoice payment that was made need to remain in your transactions page in order for your accounting to remain accurate.
Just throwing this out here with what I've been toying with recently.
I prefer to use my personal American Express card for company travel and reimburse myself because of airline miles. I also work in foreign countries where I'm dealing with foreign currency cash out of my wallet. I don't want to have to split business cash versus personal cash. So most business expenses run through my personal finances. I know CPA's cringe at this, but it's easier for me to deal with. I'm also a company of one run as an S-Corp.
I want my business related expenses to be line-itemed in the business account. So all my receipts are added individually but the expenses were paid outside the business. So far, I have drawn these transaction from my business Cash on Hand account which I otherwise don't use. On occasion, I'll actually transfer money from my business checking account to my personal account. That ACH transfer shows as a credit to the business checking account and I categorize it as a transfer into Cash on Hand. Cash on Hand now equals $0. The checking account balances with the bank statement. Expenses are still line-itemed and categorized with their expense accounts. And I have my money back in my personal account. Mentally this works because I've treated my own money as business cash. I've just done an ATM withdrawal from my business checking account in a very roundabout way.
I think my next step, though, for better tracking would be to create a new liabilty account called Expense Reimbursement and treat it as a credit card. Expenses are still line-itemed as individual transactions against the "credit card" account. When I do an ACH, I mark it as a transfer from my business checking into the Reimbursement credit card account and accomplish the same thing. This cleans up my Cash on Hand account for in the future when I really need to make use of it.
Am I completely off base with setting up a Reimbursement account as a liability account instead of an asset account?
I think there's a little bit of confusion because the Wave guide articles suggest splitting payments to match reimbursed expenses. I prefer instead to have income payments match invoices. This allows the income transaction to appear in the list as "Invoice #1234 | Payment from Some Company, Ltd". If you do that, though, then you lose the ability to split the transaction.
The way I run my business is more as a consultancy rather than as a company that does sales so my approach might be different. When I travel for a client, I might have $2000 worth of travel expense. I show this as a single line item on the invoice. The receipts in Wave are of various quantity and cost and I don't care. The year end summary will balance. So my invoice might be for $5000; $2000 of which was for expense reimbursement that the client paid. That's fine, I don't care. For tax purposes I already have expenses that offset that amount. I don't need to match that income with those items.
Hey @Brice_H sorry for the delay here! You'll want your reimbursement account to be an asset account, not a liability account, because what you're essentially indicating is funds you're expecting to receive, whereas a liaiblity account represents money you owe. If you track using a liaiblity account, your records will show that you reimbursed your customers, and you'll risk tracking an expense twice. In the case of purchasing something for your customer, they owe you money, not the other way around. You'll still be able to track the initial expense against the business; just categorize it to the refund for job income account you create in the second step of the article.
I don't see a Reimbursed Expenses account
Hey @eddiesullivan. In the case that you don't see the reimbursed expenses account -- you will need to make sure that this is created in Wave (you can simply just go to the Chart of Accounts section and create that specific account there).
New user here. I followed the steps 1-4 above, but when I went into my invoice to add the reimbursable expense (clicking on the Edit Income Account as directed), the invoice still showed an hours/rate format. It didn't let me list just a dollar amount. It wanted to force me to indicate hours and rate. How can I include a reimbursable expense in an invoice primarily designed to invoice for services in an hours/rate format?
Hi @LBarlow_416 . If these headings don't work for you, you can change them under Invoice Customization to something which does. You also have the opportunity to remove them from the invoice so that it's only the amount showing.
Hey @GoGreen_123 . When it's accounted for through the invoice it's added as income, and then when you create an expense transaction for it it becomes an expense, zeroing out the income. So no, it is not counted as profit.
I found it very helpful having it shown in stages. I have set up my Reimbursable account now and its working like a charm. Thank you very much.
And it is Not a profit as the Administrator explained, because the expense negates the income...
super helpful!
Helpful, thanks. But... we really need a way to create line item expense invoices with the ability to include receipts!
I do consulting work and will submit my travel expenses as a separate invoice. Receipts required. Right now, I don't see a way to do this in Wave- either the line itemed expense invoice OR submitting receipts. Is this on the product roadmap or can I submit it for consideration?
Thanks
Hey @richkrn
As our invoicing is being currently redeveloped, our team is on the forum looking through it daily to gain more info. We don't have ETA's on whether this is on the product roadmap but attachments to invoices and bills is something that we are very much in the know about. Sorry we aren't able to give you an ETA.
Thanks for the reply @BarsinA
Happy to provide a run-through of my workflow anytime for the team
I also really need to be able to attach a digital copy of a receipt (for a reimbursable expense) to my invoices. Is that function available yet? Soon??
Hey there @JCJODICLARK
Unfortunately this feature is not available at the moment. We will announce to the community once it becomes available.
I'm trying to follow these instructions, but there are some problems.
"When you add the reimbursable expense line, be sure to click Edit Income Account, and select the Reimbursable Expenses account we created in Step 2." < There is no "Edit Income Account" when adding a new item to an Invoice. There is a "View income account" which will display which account this particular item is assigned to. In my case, it's the "Reimbursed Expense" account I created previously.
I don't quite understand how I'm supposed to record the payment for this expense. The client made a payment, which included the expense. It seemed the best way to handle recording the payment would be to use the "Split this deposit" option on the specific transaction for the payment (imported from my bank). I split the payment into the payment for the service and the reimbursed expense, when combined equal the total payment amount. However, after doing this, the Invoice shows as "Overdue" for the amount of the expense. Not really sure how I'm supposed to proceed from there.
Hey @shafnitz . Let me clarify for you:
1. If you're creating/adding a new product to your invoice, it allows you to edit the income account. If you're trying to edit the income account on a pre-existing product, you need to head over to the products/services page and edit the income account there.
2. I think you may be categorizing the refund to the invoice, instead of to the income account. Make sure that you select Refund for Income > Reimbursable expense instead of selecting Refund for sent for an Invoice in Wave.
Try this out and let me know if it works for you.
@AlexL
1. I see what you're saying here. Your article should be updated to clarify that you can only Edit Income Account when creating a new Product from within an Invoice, and not when adding a line item of an existing Product.
Hey @shafnitz . Seems I may have misread the situation so let me correct myself here. The transaction you have should not be split out as you want the invoice to be fully marked as paid (as it has been paid). After the fact, you'll create an expense transaction in Wave, categorizing to Refund for Income which will allow you to select Reimbursable expense.
Try this out and let me know if it works for you or not.
So, I think I followed your directions correctly. But can you please explain what exactly this is accomplishing? I'll be honest, this seems convoluted, and more of a workaround than an actual proper workflow. How does this scale to even a medium-sized business? This essentially seems like an adjustment. So manual adjustments need to be entered for all expenses? Is that typical for business accounting?
How do you SPLIT reimbursable expenses from other income on the invoice? For example, as an independent contractor, my "consulting income" is taxable as 1099 income, but my expenses are not. I want the invoice to show:
CONSULTING INCOME: $3,000
EXPENSES: $2,000
TOTAL: = $5,000
This way the client knows they should NOT include the expenses when they report 1099 income to the IRS.
I bill travel expenses to the client.
So, I followed the process above and created an Other Income Account called Reimbursed Expense. Then, I made sure that my Travel Expense related products were mapped to the new income account called "Reimbursed Expense." So now, the invoice maps the income to an Other Income account called "Reimbursed Expense.
However, I paid a Travel Expense using a Business Debit Card, and that bank is connected to Wave, so when the bank transactions synced over Wave created a transaction for the same expense that I billed to the client on the invoice. What account should the transaction created by the Wave Receipt be mapped to?