QuickBooks is no more a new name to the accounting and banking experts. This software comes with several opportunities for all those people struggling with incomes and expenses. The customizable features in QuickBooks make everything simpler for you. You cannot down almost every type of income and expense in QuickBooks. This also includes reimbursements. QuickBooks allows you to record all the expenses that you have paid out-of-pocket. To get a thorough knowledge of reimbursement, follow this article.
What is reimbursement?
Reimbursements are the nontaxable payments that you make to an employee. It is used to repay business-associated expenses that the employee has paid from his or her pocket. It is not included in expenses that got tax implications. Rather, it typically includes expenses like regular or limited business travel.
How to add reimbursement pay type in QuickBooks?
To add reimbursement, pay type, if you are opting for QuickBooks services, you need to follow the given below steps:
Step 1: Log in to your QuickBooks account.
Step 2: Now, locate the “Employees” option in the left navigation bar.
Step 3: Now, you will see, “How much do you pay this employee?”
Step 4: Over there, if you have not chosen any other payment types, you will have to click on “Add additional pay types,” or you may click the pencil icon.
Step 5: Now, you need to select the “Reimbursement” checkbox.
Step 6: Finally, tap on “Done.”
If you opt for creating a regularly scheduled paycheck or an unscheduled check for your employee, the reimbursement field will be displayed in the compensation section on the “Enter Employee Pay Details” page.
After all these, you need to create paychecks using the Reimbursement pay type that you have created new with, including the reimbursement amount.
How to record all the business items or expenses that you have paid with your funds?
Before reimbursement, firstly, you will need to record all the business items or expenses that you have paid with your funds. To do it, follow the given below steps correctly:
Step 1: Locate the “+New” option, and click on it.
Step 2: From there, click on “Journal Entry.”
Step 3: On the first time, for the purchase, choose the expense account.
Step 4: Now, go to the “Debit” column, and input the purchase amount.
Step 5: Then, you will have to select “Owner’s equity” or “Partner’s equity” on the 2nd line.
Step 6: Now, in the “credits” column, you will have to input the same purchase amount.
Step 7: Finally, you will need to hit the “Save and Close” option.
Once you have completed the above steps, you will have to reimburse the money. Now, you will get two options for doing it. Either you can reimburse the money through a “Check” or an “Expense.”
How to record reimbursement as a check?
To record the reimbursement as a check, you need to follow the given below steps:
Step 1: Look for the “+New” option.
Step 2: Over there, you need to tap on “Check.”
Step 3: Now, go to the “Category” column.
Step 4: From there, you will need to select either “Partner’s Equity” or “Owner’s Equity.”
Step 5: Now, you will have to enter the amount correctly.
Step 6: Finally, tap on “Save and Close.”
How to record reimbursement as an expense?
If you wish, you may record the reimbursement as an expense as well:
Step 1: Find the “+New” option in QuickBooks.
Step 2: From there, you need to tap on “Expense.”
Step 3: Now, you will need to choose a bank account for reimbursing your funds.
Step 4: Now, go to the “Category” column.
Step 5: Over there, you need to wither tap on either “Partner’s Equity” or “Owner’s Equity.”
Step 6: Now, it is time for you to input the amount of your reimbursement.
Step 7: And now, finally, click on the “Save and close” option.
If you follow the abovementioned steps correctly, you will be able to easily record reimbursements. Indeed, QuickBooks is a robust software that can solve your problem very easily. But, it works better when you are familiar with banking and accounting-associated works. If not, it is recommended for you to hire any professional or expert to prevent any kind of uncertain situation, like data loss.