Do your business’s employees use their own money to purchase products or services related to their respective job? If so, you’ll need to reimburse them. Employers in the United States are required to either purchase these essential products and services on behalf of their employees, or they may reimburse their employees for the cost of these products and services. When taking the latter route, of course, you’ll have to record the reimbursements. In Quickbooks, you can record a reimbursement to an employee in a few easy steps.
Create a Journal Entry
Quickbooks offers journal entries as a way to record reimbursements. You can create a new journal entry in Quickbooks Online by selecting the “Create +” button on the home screen, followed by “Journal Entry.”
When setting up the new journal entry, you’ll need to choose a liability account as well as the dollar amount of the reimbursement. You’ll also need to select the employee for whom you are recording the reimbursement under the “Name” drop-down menu. For the “Account” menu, choose an expense account. For the “Debits” field, enter the dollar amount of the reimbursement. After completing these steps, click “Save and close” to finish setting up the new journal entry.
Pay the Employee
Upon creating a new journal entry, the reimbursement should be recorded in your Quickbooks account. However, you’ll still need to pay the employee. After all, that’s the entire purpose of a reimbursement.
To pay the employee for whom you recorded the reimbursement, click the “+ New” button on the home screen and select “Expense.” From the “Payee” drop-down menu, find and select the employee’s name. Next, click the “Category” drop-down menu and choose the option for a liability account. If you don’t already have a liability account, you’ll need to create one.
You’ll also need to specify a few other pieces of information to pay the employee, including the dollar amount of the reimbursement. After completing the required fields, select “Save and close.” Keep in mind that Quickbooks Online Payroll offers a special type of account for reimbursement payments. Known as a reimbursement account, it will keep all of your reimbursement payments grouped together so that you can easily access and analyze them. Even without Payroll, though, you can still record reimbursements, and you can still pay employees for those reimbursements.
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