Reimbursements for Construction in Progress

LynnATX

I run a construction company and the bulk of my transactions are items that I get reimbursed for.

I've found the article on "How to account for reimbursements" and am following that, but it doesn't quite fit my scenario, so I'm hoping someone can help me figure out how to book it.

Upon further reading, I think the items I pay for are a technically a loan FROM my company. Reimbursements are because someone else loaned the company money, so they get booked as a long or short term asset. I still don't fully know how to book it though so any help is still appreciated.

I'll use a real world example.

I have a my construction company that has a checking account (Construction Co Account), and each project we build, has it's own checking account as well (House #1 Account, House #2 Account, etc). All of these accounts are setup in Wave Accounting.

Before a project really gets going, we have expenses we incur that we end up writing out of the Construction Co Account. We consider these loans to the House # Account. When we open the House # Account, we transfer the money we've spent to date FROM the House # Account to the Construction Co Account.

For tax accounting purposes, these "expenses" are all ultimately Construction In Progress, which should be an asset account, not expenses. I do all of my job costing in outside software, so don't need expense categories like plumbing, HVAC, etc in my accounting software.

My question is, how do I book these in Wave? Do I setup a credit card account called Reimbursements like I would for reimbursing expenses to a person? And then set my category as a "Construction in Progress" asset account? Then how/where do I link the reimbursements from the House # Account when the reimbursement happens?

Thanks for your help on this,

Lynn

AlexL

Hey @LynnATX , it seems like you've found yourself a workaround to tracking project accounting in Wave which is a feature that we don't support. I'm happy to see you found something which works for you and your business!

With that being said, because you're working off of a workaround it's difficult for us to offer advice on the best way to handle reimbursements with these factors at play, especially because it's more of a complex situation when it comes to the accounting.

I'd highly recommend reaching out to a CPA or accountant to help you determine the best way to handle this. I wouldn't want to advise on something that may lead you astray, especially based on the complex circumstances of how this is being handled.