Consultant Expense Category

pvel3pvel3 Member Posts: 4

I need assistance understanding where to place fees paid to consultants, that will be reimbursed by the client. Does it go under Subcontractors' Expense, Professional Fees, or Accounts Receivable?

I pay the consultant (engineer/interior designer/ADA specialist) $1000 from the business account on a project. The client will be billed $1000, among our fees.

Thank you

Comments

  • MikegMikeg Member Posts: 995 ✭✭✭

    @pvel3,
    Either subcontractors or professional fees. You may need to issue them a 1099 if they are not incorporated or an S-Corp. So grouping them in one place would help you at year end. Accounts Receivable represents amounts you have invoiced but have not been paid.

  • pvel3pvel3 Member Posts: 4

    Follow-up about 1099:

    Would I need to file a 1099 in Business to Business transactions? For example, my Partnership LLC paid another Partnership LLC for Engineering Services.

    Thank you.

  • MikegMikeg Member Posts: 995 ✭✭✭

    @pvel3,
    1099's are required to be issued from a business to any non incorporated entity. So a partnership would meet that definition. A 1099 should be issued to them if they were paid more than $600.

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