Pass Through Expenses

bsashcraft

Hello,

I am unsure how to setup proper accounting for my expenses under this scenario:

I recently reworked a website for a company. Let's say that work paid my company $5,000. I have received payment for my services in full, meaning my profit with that customer is currently $5k.

As part of the contact with my customer, I agreed to provide and manage their email accounts through Google (G Suite), for two years.

Every month receive a bill from Google for G Suite. Let's say it's $20 per month.

I pay that bill with my company debit card.

I then want to show that expense against my customer's $5k balance, so I can track where my profit/loss is against that balance.

My customer also has additional monthly/quarterly/yearly expenses which I need to track. I want to make sure I can track each expense individually, for reporting purposes.

Any help appreciated. Thanks in advance for your help.

ChelseaK

@bsashcraft It's a great question and you could do a couple of things here:

1) You could treat each payment as a refund for the income. Every time you pay that $20.00 bill, you can head to Accounting > Transactions and categorize the expense as a Refund for an Income.

2) Another option would be to treat part of your income for the $5,000 payment as a loan for the Google G Suite subscription. To do this, head to Accounting > Chart of Accounts > add a new liability account. Then, create a journal transaction which will move the income over to a liability holding account (debit your checking account and credit your liability account). Then, each time a payment is made for the $20.00 monthly G Suite subscription, debit the loan account and credit your business checking account. You can read the details on accounting for loans in this Help Centre article: https://support.waveapps.com/hc/en-us/articles/360000041883-How-to-account-for-a-loan

This all being said, I recommend checking in with a professional accountant for their opinion on the best way to track this!

For your customer who has monthly, quarterly, and yearly expenses, you can set-up a recurring invoice for them which will allow you to keep track of these payments. Head to Sales > Recurring Invoices to set-up the scheduler. Just in case, here's a guide for getting started with Recurring Invoices: https://support.waveapps.com/hc/en-us/articles/115002487743-Guide-to-recurring-invoices