Reimbursements Need to Match Vendor Payments
I do bookkkeeping for a real estate company. I need help with the profit and loss report in QuickBooks.
For example: we will receive a bill from a vendor, and let's say the total is $100.00. I write the check and pay the bill. I then bill our agents, and they pay us back. None of this is done in QuickBooks until later. The agent's portion is, for example, $75.00. I only want the net of $25.00 to show up in our loss for advertising, not the whole $100.00 But I still need my register to show the -$100.00.
I have set my agents up as customers and the advertiser as a vendor. I know that I need to create a bill pay for the bill then invoice my agents. My question is how do I get the $75.00 to not show up in my profit and loss and the $25.00 to show up for our advertising cost?
It's good that you are getting help for this. It's an important process that must be done correctly for the Profit and Loss to show as you want it to. Here are a few tips:
1. Dates Must Match. The vendor payment will only match your agent's reimbursement if they both occur in the same accounting period. If they occur in different accounting periods then they will show up on the Profit & Loss in the accounting period in which they occured. So, in other words, the date of the vendor bill must match the date of the invoice to your agents, or at least be in the same month, in order for them to hit the Profit & Loss at approximately the same time.
If this does not happen, then you will see a $100 expense in one period, and a credit of $25 to Advertising in another period (to use your numbers).
2. Mark the Vendor Bill "Billable." When you record the vendor bill, use the "Enter Bills" feature. Enter the appropriate information in the upper half of this screen. In the lower half of the screen post the expense to an expense account such as Advertising. Select the appropriate agent in the Customer:Job column, and be sure the transaction is "billable."
When you pay this vendor bill, be sure to use the "Pay Bills" feature. This does two things: it shows the vendor bill as "Paid," and it creates a bill payment check for your check register. The full $100 will show in the check register.
3. Invoice Your Agent. Create an invoice to your agent by opening the Invoice screen and selecting the appropriate agent in the top left box. QuickBooks may remind you that you have billable expenses for this agent. Follow the procedure for placing these billable expenses onto your agent's invoice.
This is an important step. If the vendor bill and your agent's invoice occur on the same day, then you can run a P&L for this day and see that the vendor bill increased your Advertising expense to $100 (to use your numbers again), and the agent's invoice lowered the expense by $75, making a net expense of $25 for Advertising.
One more thing: I encourage you not to wait to post these transactions into QuickBooks. If possible, this should all be done as it happens, and not later "after the fact." Doing it as it happens will help keep the dates in alignment that I mentioned in step one.
I hope this helps. Thanks for writing.
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