![]() Expense not related to business operation: During business travel, employee may use their own money first and expect to claim back later.Expense not meet company requirement: Some expenses are not comply with company policy as the supplier can’t issue proper invoice.Expenses over the budgets: Without getting approval from management, there is a risk that the expense over company budget.It is not practical to get approval on the bill, so employee use their own money and reimburse from company later. The last type is medical reimbursement, it happens when employee go to visit the doctor and claim back from company. For the per diem, the company use the fixed rate and paid to employee. The company will reimburse base on the actual invoices. The traveling is the actual expense for plan, bus or taxi. The expense may include travel expense and per diem. ![]() The expenses are different from company to company due to the internal policy. Travel ReimbursementĮmployees may find themselves travel for business purpose and for sure they may spend their money first and reimburse back later. The payment must attach with proper supporting documents. The employee must reimburse to company as soon as possible after completing the transactions. Other small expenses which usually paid by petty cashĪll of these expenses must be record within a proper accounting period.The employees paid for expense while working for company and relate to business activities. Due to various reasons, the employees pay to supplier and reimburse from company. They are the expense reimbursement intent to supporting the business operation. There are so many kinds of reimbursement, however, we can divide them into three main categories as following Business Reimbursement We ignore expense classification in this example to simplify the concept for you. Note: We may separate the expense into travel expense, accommodation expense, per diem and so on. Account Debit Credit Expense* 6,000 Cash Advance 5,000 Cash 1,000 To record the reimbursement: The company make journal entry by debiting expense and crediting cash advance. Account Debit Credit Cash Advance 5,000 Cash 5,000 To record the advance entries: the company record debit cash advance and credit cash. When he arrives at the office, he prepares the supporting invoice to clear advance of $ 5,000 and reimburse additional $ 1,000 which is paid with his own money. However, at the end of the week, he had spent up to $ 6,000 for all expenses. He had advanced cash $ 5,000 for the total expense include food and hotel. Then staffs need to use their own money to settle with supplier. It happens when staff advances cash but it less than the actual expense. Reimbursement expense is also the additional cash paid to staff due to overpayment. They are usually the miscellaneous expense that has low risk so they are not required to have approval before making payment. These parties use their own cash to pay for company expense and then reimburse back. ![]() We're always here to help you some more.Reimbursement is the payment that company pays to staff, customer and other parties to settle the expenses that they have paid on behalf of the entity. Let me know if you have additional concerns. You'll also want to run the Vendor QuickReport to see the journal entry transactions and to ensure they're recorded accurately in QuickBooks. To make sure your books are accurate, I'd recommend consulting an accountant for proper guidance. Follow the steps on how to use the clearing account outlined in this help article: Set up a clearing account. Once done, create a journal entry to move the employee's reimbursement to pay the contractor.
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