Reimbursing an employee who is also a customer via invoice discount
justdave
Member Posts: 15
My situation: I am retroactively entering data trying to reconstruct records from a previous company treasurer who didn't keep good records. I have an employee who is also a customer. He submitted receipts for reimbursable expenses. This receipt was logged as being paid from his employee reimbursement credit account, as usual. However, he's also a customer, and the reimbursement was actually paid to him by reducing the amount of his customer invoice at the time by the amount of the reimbursement. How do I account for this? I don't seem to be able to use his reimbursement account as a funding source for the invoice payment, and thinking about it, the money is conceptually moving the wrong direction trying to do that (if it did let me do it, it would show as that much more to reimburse, not that the reimbursement had been paid). So somehow I need to make the same amount of money magically appear to two places? (pay both his reimbursement and the invoice?)
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I think to make this work I have to somehow convert the debit from his employee account into a credit on his customer account, and then apply that credit to the invoice. It's getting from the reimbursement debit to the customer credit part that I'm stuck on.
OK, I think I figured it out.
Withdrawal from Cash on Hand to pay into his reimbursement account, paying it off.
A corresponding Deposit into Cash on Hand to cancel it out, which deposits into his customer account.
This appears to have done the trick.
Hey there @justdave
I'm curious if you've taken a look at our "reimbursable expenses on an invoice" help center article and whether this could share some potential insight into how to properly account for this?
Hi @Barsin
The article is about customers reimbursing the company for expenses made on the customer's behalf (which is also what every article I could find about customer reimbursements was actually about, on any platform, not just Wave, in general online searches).
In my situation, the company is reimbursing the customer for an expense that the customer made on our behalf, by deducting the amount they spent off their invoice (instead of us cutting them a reimbursement check, we just charge them that much less on their current invoice).
The way I ended up doing it may actually be the correct way to do it, it just seems like it's a little bit of a hack.
Step by step what I ended up doing:
1. Log the expense as a receipt, and pay it from the employee's reimbursement account (in this case, it was an employee who was also a customer - you'd need to create a reimbursement account for the customer separate from the customer credit account for this to work, anyway).
2. Log a transaction in "Cash on Hand" paying the reimbursement into the reimbursement account like you would do normally, except that we're not actually writing a check (which is why its in cash and not the checking account).
3. Instead of writing a check, log another transaction depositing the same amount right back into the "Cash on Hand" account, cancelling it out. The category for the deposit is set the the customer credit account that goes with that customer. The customer now has a credit balance for the amount of the expense receipt. I put comments on both transactions pointing out the one it was paired with to explain why it was done.
4. On the invoice, record a payment, using the customer credit account as the source of the money.
Information about the employee reimbursement accounts (mentioned in the above steps) can be found in https://support.waveapps.com/hc/en-us/articles/115005928103-How-to-account-for-reimbursements
Information about customer credit accounts (mentioned in the above steps) can be found in https://support.waveapps.com/hc/en-us/articles/360000278846-Accounting-for-overpayments