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reimbursable expense

What Is an Inventory Part?

Chief Mechanic · September 25, 2010 ·

An Inventory Part is one type of Item and is maintained on the Lists->Item List menu selection.

See our article on all of the Item types supported by QuickBooks for more information.

Generally speaking, Items are designed to pre-fill invoicing and purchasing forms. An Inventory Part represents an item that your firm keeps on hand for sale to customers. It can be stocked and sold on its own or included as part of an inventory assembly.

Here’s a screenshot of the QuickBooks Item List showing a range of inventory parts:

QuickBooks 2011 Item List Inventory Parts

QuickBooks tracks certain information that apply only to Inventory Parts. Fields tracked only for Inventory Parts include:

  • Quantity On Hand
  • Quantity On Purchase Order
  • Quantity On Sales Order
  • Reorder Point
  • Asset Account

Some fields are tracked both for Inventory Parts and other item types, such as Inventory Assemblies and Non-Inventory Parts. Some – but not all – of these fields also may be tracked for other item types if you select the checkbox This item is used in assemblies or is a reimbursable charge. These fields are:

  • Quantity On Pending Builds
  • COGS Account
  • Preferred Vendor

The above screenshot shows a mix of inventory parts and sub-items of inventory parts. This structure is often described as a “parent child relationship”, where a sub-item is a child of its parent. While both parent and child items are labeled as Inventory Parts, QuickBooks only tracks quantity information for sub-items (i. e., child items) when this structure is used. It does not aggregate information for parent items where sub-items exist for that parent item.


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How Can I Record Vehicle Mileage As a Reimbursable Expense?

Chief Mechanic · September 6, 2010 ·

To record vehicle mileage as a reimbursable expense, you first need to set up the vehicle in the Vehicle List and the Service or Other Charge Item that represents the rate at which customers will be invoiced for mileage. 

Once these preliminary steps have been completed, click on the Company->;Enter Vehicle Mileage… menu selection to record the mileage for a trip.

To make this trip a reimbursable expense, be sure to check the Billable checkbox, specify the appropriate Customer:Job, and choose the Item you previously created that is the source for your invoice description and the rate at which you will invoice your customer.  Enter your Notes for the trip – you’ll have the option of incorporating this information into the customer invoice later.

QuickBooks Premier 2009  Enter Vehicle Mileage Billable

Click the Save & Close or Save & New button to save your work.

Next, click on the Customers->Invoice for Time & Expenses menu selection to start a new customer invoice and add mileage expenses to it.  Select the Mileage tab.  Unlike reimbursable expenses that appear on the Expenses or Items tabs, you have more control over how information is transferred to a customer invoice for expenses that appear on the Time or Mileage tabs.

QuickBooks Premier 2009 Choose Billable Mileage

Click the Options… button to specify how information will be transferred to a customer invoice.  You can opt to use the Notes you entered when you recorded the mileage (Transfer activity notes), use the description you specified when you created the Item (Transfer item descriptions), or both (Transfer both notes and descriptions).  You can also choose to have each trip appear as a separate line item or to combine trips that use the same service item and rate.  If you opt for the latter, only the item description will appear on the customer invoice.

QuickBooks Premier 2009 Options for Transferring Billable Mileage

Click Ok to close the Options for Transferring Billable Mileage window.

Select the mileage expense items that you’d like to include on a customer invoice and click Ok.  The expense items you selected will appear using the options you specified.  Complete the invoice and save your work.

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How Do I Manage the Vehcile List?

Chief Mechanic · September 6, 2010 ·

QuickBooks maintains a Vehicle List and can track the mileage for those vehicles, as well as help to charge customers or clients for mileage recorded.

The Vehicle List tracks 3 simple pieces of information about a vehicle: the name, the description, and the active status.

To manage the Vehicle List, click on the Lists->Customer & Vendor Profile Lists->Vehicle List menu selection.

QuickBooks Premier 2009 Vehicle List

Click on the Vehicle button to add, edit, delete, or change the active status of list entries.

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How Do I Prepare To Charge Customers For Mileage?

Chief Mechanic · September 6, 2010 ·

The first step to charge customers or clients for vehicle mileage is to create a new Item with a type of Service or Other Charge.  The Sales Price that you enter for this Item will be the price charged to the customer for mileage.

QuickBooks maintains a separate list of Mileage Rates, but these rates are not automatically used to invoice customers.  Instead, they’re just a reference for the historical rates allowed by taxing authorities.

Click on Lists->Item List to add a new Item.  Be sure to specify the Type as Service or Other Charge, and to select the This item is used in assemblies or is a reimbursable charge checkbox just below the Item Name/Number field.

Specify both an Expense Account and an Income Account for the Item you create.  Enter the description you’d like to appear on customer invoices and the rate you’d like to charge customers for mileage in the Sales Information block.

QuickBooks Premier 2009 New Item Mileage

Click Ok to save the Item.

You’ll use this item code on customer invoices and to identify those mileage expenses that will be billed to a customer as a reimbursable expense.

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How Do I Enable Automatically Invoicing Customers For Reimbursable Expenses?

Chief Mechanic · September 1, 2010 ·

The first step to automatically invoice customers or clients for reimbursable expenses is to set a QuickBooks preference.

For more information on handling reimbursable expenses, see our related articles on what distinguishes a reimbursable expense from other expenses, invoicing a customer for reimbursable expenses, removing expenses from the list of billable expenses to be invoiced to a customer, and finding out which reimbursable expenses haven’t been billed to a customer.

Click on the Edit->Preferences menu selection to open the Preferences window.  On the Company tab, click on the Time & Expenses sub menu.  Be sure that under the Invoicing options block, the preference to Create invoices from a list of time and expenses is checked.  This preference must be set before entering vendor bills for which you plan to seek reimbursement from a customer or client by issuing an invoice.

QuickBooks Premier 2009 Preferences Time & Expenses Invoicing

If you select the preference Track reimbursed expenses as income, then the income – but not the markup – associated with billing a customer for each reimbursable expense can be sent to a specific income account as discussed below.

If you don’t specify an income account for each expense account, the income associated with invoicing a customer for a reimbursed expense will be sent to the expense account itself.  The Default Markup Percentage is the percentage that the reimbursed expenses will be marked up.  If your markup is a positive percentage – that is, you’re charging your customer more than the actual expense to account for administrative or handling charges – the markup is sent to the Default Markup Account.  The amount charged to a customer excluding the markup is either sent to an income account you specify or to the expense account.

If you specify a positive Default Markup Percentage, QuickBooks will automatically create a new Item in your Item List – a Group named Reimb Group.  With a positive markup, QuickBooks will automatically subtotal reimbursable expenses on an invoice and display the markup and the total of the markup and the reimbursable expenses themselves.

For each General Ledger Expense account that you’d like to match to a corresponding Income account, edit the General Ledger account by clicking on the Company->Chart of Accounts menu selection or using the keyboard shortcut Ctrl + A.  Select the Expense account you’d like to match to an Income account and edit the account by clicking on the Account button at the bottom of the Chart of Accounts window or using the keyboard shortcut Ctrl + E.  Click the checkbox for the Track reimbursed expenses in Income Acct. setting and specify the Income account in the pulldown list.

QuickBooks Premier 2009 GL Add Account Track Reimbursed

You must assign a different Income account to each Expense account.  Otherwise, you’ll receive this warning:

QuickBooks Premier 2009 General Ledger Warning 7

Enabling the preference and setting the relationships between income and expense accounts for reimbursable expenses is just the first step in automatically invoicing customers or clients for these types of expenses.  Other steps include marking expenses as reimbursable, finding uninvoiced reimbursable expenses, and removing an expense from the list of those to be billed to a customer.

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