Billable and Reimbursable Project Expense

SemmlerSemmler Member Posts: 1

Hello Everyone,

I'm new to Wave and I have the following scenario that I need to handle:

I'm self employed freelance consultant and I invoice my customers based on the consulting hours provided and expenses incurred for travel, hotel stays, metro tickets, etc.

Since I invoice my customers the expenses incurred, I need to:

1) Declare the billable expenses as income, since as per the Tax Authorities it still counts as part of my company turnover.
2) Reimburse these expenses to the employee, in this case to my personal account.

I've read the guide on how to account for reimbursable expenses, but it doesn't solve my issue since the expense is directly offset from the income account (https://support.waveapps.com/hc/en-us/articles/115000588103-Claim-reimbursable-expenses-on-an-invoice) and I need to track the income and reimbursement paid separately.

What is the best practice to do this?

Thanks in advance for all the help!

Comments

  • ErikErik Administrator Posts: 190 admin

    Hi @Semmler thanks for joining us!

    At this time, we don't have a straightforward way to do this. However, I can definitely bring this up to our Product Team as a feature request.

    My workaround would be as follows:

    1. Create an income account for your reimbursable expenses
    2. Add whatever you need reimbursements for onto the invoice and assign it to the income account above
    3. Record your expenses separately on the Accounting>Transactions page
    4. When your invoice is paid, you would have income tied up in the income account you created in Step 1
    5. Now, create a journal transaction to DEBIT the income account from Step 1 and CREDIT the expense category you selected in Step 3. This will remove the funds placed in the income account and use it to "repay" the expense account directly.

    By the end of this, you would have represented money first entering the income account when the invoice is paid, but then being used to repay an expense via a journal transaction.

  • scottmanduscottmandu Member Posts: 2

    How can I deal with this when the expense is in 2018, and the reimbursement in 2019? Using this method will reduce income on the income statement in 2018. Doesn't seem to wash out then for tax purposes, at least in the same year.

  • scottmanduscottmandu Member Posts: 2

    Hi @Erik Any thoughts??

    @scottmandu said:
    How can I deal with this when the expense is in 2018, and the reimbursement in 2019? Using this method will reduce income on the income statement in 2018. Doesn't seem to wash out then for tax purposes, at least in the same year.

  • JamieDJamieD Administrator Posts: 875 admin

    Hi @scottmandu. Since you are creating a Journal Transaction for this in 2019 -- it should not reduce the income balance in 2018 (it will be unaffected by this transaction). If you could please go forward and attempt to try this on your account and if you see any backlash/balances changing anywhere, please let me know so I can do a bit of further investigating on my side.

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