Reimbursement is a non-taxable payment to the employee. If your employee has paid the business-related expense from their personal funds then you can pay them back by recording their expense amount in your QuickBooks account. QuickBooks allows you to record the reimbursed expenses for both owners and employees. If you are seeking help to learn how to record reimbursed expenses in QuickBooks Online, we are here to guide you with the right details.
In this detailed guide, you will learn easy ways to reimburse an employee as well as the owner/partner in QuickBooks Online.
- How Do I Record Reimbursed Expenses in QuickBooks Online?
- How to Record Employee Expense Reimbursement in QuickBooks Online?
- How to Record Reimbursed Expenses in QuickBooks Online (for Owners)?
How Do I Record Reimbursed Expenses in QuickBooks Online?
In QuickBooks Online, reimbursements can be recorded for both employees and owners. Here, we will show you the whole procedure for how to record expense reimbursement in QuickBooks Online. Let’s dive in!
How to Record Employee Expense Reimbursement in QuickBooks Online?
To record the expense that your employee paid from their pockets, first you need to record it in your account and then pay the amount later. Here, we will show you how to pay the employee, record expenses for future payments, and track the employee reimbursements.
Note: If you want to reimburse the contractor then you should first set up as the supplier and then add the bill to pay them.
Pay the Employee
To repay the employee, you can create a cheque or expense. For that, you just need to select the specific employee, choose the liability account, and enter the necessary details such as the amount.
- Click on the “+New” button.
- Then, click on the “Expense” or “Cheque” option.
- After this, click on the “Payee” drop-down menu.
- Here, you can search for the employee.
- Once done, select the “Category” drop-down menu so that you can find the liability account.
Note: In case you have no liability account, make sure you create a new one.
- Thereafter, you can add the following details:
- Amount: Type the amount you owed to the employee. Make sure you break down the reimbursement amount in different line items especially if you track or make it billable for several customers.
- Customer: In case you want to track the amount for a particular customer, you can choose the customer using the drop-down menu. However, you may need to enable the “Billable Expenses” feature.
- Billable: If you prefer to offset your expense on the invoice of your customer then you can place the checkmark under the “Billable” box.
When done adding the information, you can save the details by clicking the Save button. Alternatively, you can press the “Save and close” button.
Record Expenses for Future Payments
In case you prefer to enter the expenses for a future payment then you will have to create the Journal Entry for this. Thereafter, you need to make sure that you fill out the first and second lines correctly with the required information.
- Click on the “+New” button.
- Choose the “Journal Entry” option.
- After that, enter the following details on the first line:
- Choose the liability account under the “Account” section.
- Now, add the amount you owed the employee under the “Credits” section.
- After that, search for the employee name using the “Name” drop-down menu.
- Once done, you can enter the following information on the second line:
- Here, you need to choose the expense account under the “Account” section. Make sure you select the account based on the purchase made by your employee.
- Once done, type the purchase amount under the “Debits” section.
- Then, click on the “Save and Close” button.
Once you are done recording the Journal Entry with all the necessary details, you can pay them using an expense or cheque.
Track the Reimbursements of an Employee
In case you have not fully paid the employee, by running the Transaction Detail report, you can be aware of how much amount you owe to your employee. All you have to do is check the transaction details from the Reports menu. Thereafter, you can use filters such as report period and then run the report to track the reimbursements of your employees.
- Navigate to the “Reports” menu.
- Then, look for the “Transaction Detail by Account”.
- Now, open the report and choose the “Customise” located on the top.
- From the “General” section, click on the “Report period” drop-down menu to choose the transaction range.
- After this, from the “Rows/Columns” section, click the “Group By” drop-down menu.
- Then, select the “Employee”.
- Click the “Distribution” drop-down menu and select the “Employee Reimbursement” account. You can also select the liability account you have created.
- Once done, select the name of your employee using the “Employee” drop-down menu.
Note: In case you want to see what you owe the employee then make sure you set it to All.
- Hit the “Run report” button.
This is how you can reimburse the employee in QuickBooks Online. Hope you have understood how to pay your employees, record expenses for future payments, and check the employee reimbursements in QuickBooks Online.
How to Record Reimbursed Expenses in QuickBooks Online (for Owners)?
There can be instances when you are required to record the owner’s expense reimbursements in QuickBooks Online. If so, we are here to explain how to get it done.
Reimbursement can be recorded when the expenses are paid by the personal funds of the partner or owner. If you want to record the reimbursement of the owner, you can go through the following details.
Record the Business Expense Paid by Personal Funds of Owner or a Partner
If an owner or partner pays the business-related expense from their personal funds then they can get paid back by recording the amount in QuickBooks Online. All you are supposed to do is click on the Journal Entry, add the expense account and the debit amount. After selecting the partner or owner’s name, you can credit the amount to their account.
- Click on the “Plus (+)” icon.
- Then, go to the “Journal Entry” tab.
- Here, you can enter the expense account.
- After that, go to the first line and debit your expense amount.
- Here, you can choose the “Partner” account or “Owner’s Equity” and credit this account for the same amount.
- Then, click the “Save and Close” button.
This is how you can credit the amount to the account of your owner or partner if they have spent for business expenses from their pockets.
Record the Reimbursement of Owners
To record the owner’s reimbursement, one has to go to the Expense tab, select the appropriate account, pick the partner/owner, and pay them.
- Click on the “Plus (+)” icon.
- Then, go to the “Expense” tab.
- After that, you can choose the bank account you used to reimburse.
- Now, you can click on the “Partner” account or the “Owner’s Equity” on the first line.
This is all you are supposed to do to reimburse the employee, owner, or partner in QuickBooks Online.
Recording the reimbursement in QuickBooks is easy. Whether you want to reimburse the employee or owner/partner, you can repay them by recording their expenses in QuickBooks Online. For your better understanding, we have already taught how to record reimbursed expenses in QuickBooks Online for both owners and employees. We hope you find the blog useful.
To find out how to record security deposit refunds in QuickBooks, we have prepared this detailed guide.
Frequently Asked Question (FAQ)
Reimbursable expense is a cost incurred by a company. This is incurred on behalf of its customers. Mainly, the expense is managed in light of business activities. These can involve calling fees, delivery charges, travel costs, etc. This expense can be added in QuickBooks for maintaining a record of it.
You may not find a proper option that records or books the reimbursable expenses in QB. However, you can still do so by recording them in the invoices of your customers. You can add notes specifying what the expenses are for. Having done so, it will be easier for you to book and track them.
You can receive reimbursements via your clients. Then you can record them in QuickBooks. To be specific, this recording can be done in the form of billable expenses via “Account and Settings” given in the software’s settings. Then you can link those expenses with the received reimbursements.