How to record payment that I make on behalf of client?

MNEMNE Member Posts: 4

Hi there. I'm new to Wave. I provide legal services to clients (am an attorney), and often need to submit filing fees to government offices, for which I bill the client. How do I accurately record these payments on invoices, so they don't show up as payments to me?

Comments

  • MikegMikeg Member Posts: 955 ✭✭✭

    @MNE,
    The amount you bill a client should be considered your gross revenue which would include reimbursed expenses. Court filing fees etc. would be categorized accordingly, as they are paid.
    You could set up a revenue account called Reimbursed Expenses and assign that account to the services you create under Invoicing/Products and Services. For example, you would set up a Service "Filing Fees" and assign the revenue account for that service to Reimbursed Expenses. When you create an invoice and bill for Filing Fees, the revenue would be accounted for in the Reimbursed Expenses account on the income statement.

  • MNEMNE Member Posts: 4

    Thanks, Mike. That's very helpful. Just to be clear, I would mark this filing fee as a product/service that I can both "buy" and "sell," correct?

    And I will definitely keep you in mind for accounting services--thank you!

  • MikegMikeg Member Posts: 955 ✭✭✭

    @MNE,
    I would probably just stick with Items I sell. I think it would keep it easier. I'm assuming that you are paying filing fees with your own funds. I have several attorney clients that do that. We post receipts as sales and categorize filing fees and other court costs as expenses when paid.
    Thanks for your consideration!

  • MNEMNE Member Posts: 4

    Thanks again Michael.
    I'm new to Wave, so on a learning curve here, but I think if I keep "filing fee" as an item to sell, it lists it as income. I can only mark it as a "reimbursed expense" if I also "buy" it.
    I.e., how do I assign a revenue account to reimbursed expenses?

  • MikegMikeg Member Posts: 955 ✭✭✭

    @MNE,
    I would categorize the expenses you paid on behalf of a client as an operating expense with an appropriate title. These expenses were paid for with business funds. An example, let's say you bill a client for services 1500 and 60 for court costs. The court costs were paid via credit card. The income statement might look like:
    Services $1500
    Reimbursed Expenses $ 60
    Total Income $1560

    Operating Expenses
    Filing Fees 60
    Net Income $1500

  • MNEMNE Member Posts: 4

    That makes sense now. Thank you!

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