Consultant Expense Category
pvel3
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
0
Comments
@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.
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.
@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.