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JZ-22
May 22, 2023
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Employee paid a company bill and will be reimbursed through payroll (ADP). What is the best way to account for this

  • May 22, 2023
  • 1 reply
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Employee paid a company bill and will be reimbursed through payroll (ADP). What is the best way to account for this.

 

I have not entered the purchase into QBO yet. I assume I need to split the payroll when that hits qbo 

Best answer by JamaicaA

Good day, @JZ-22. 

 

I'm here to get you on the right track toward reimbursing the bill payment of your employee for the company. In this method, you no longer need to create a purchase order and split payroll in QuickBooks Online.

 

Since this is money that your business owes from an employee and will be paid at a later date, you can create a bill. To ensure the process is a breeze for you, follow the steps below:

 

  1. Go to the + New button.
  2. Select Bill under Vendors.
  3. Enter the necessary details, then click Save and close.

 

After that, use a journal entry to ensure there's no money posted on the business bank. We will then apply this to the bill you created above. Thus, it will be marked as paid.

 

Here's how:

 

  1. Go to the + New button.
  2. Select Journal Entry under Other.
  3. Ensure to debit Accounts Payable and credit the Liability account.
  4. Proceed to the + New button again and choose Pay bills.
  5. Locate the JE you've made, then press Save and close.

 

Once done, create an expense transaction to reimburse your employee. Just navigate to the + New, then select Expense. Choose the correct vendor and pick the Payroll Liabilities you used on the JE.

 

 

Navigate to the Expenses page and locate the supplier on the Vendors button. We can review the entries to check if they're recorded correctly from there. The zero amount on the Open and Overdue on your vendor's profile indicates that we successfully linked the transactions together.

 

 

As for the taxes and accounts affected, it's best to consult with your accountant. They can guide you on which action to take to record these transactions correctly.

 

Utilize this guide if you use your cash to pay for your business needs: Paying for business expenses with personal funds. It involves using journal entries and checks or expenses to reimburse the money.

 

I'm adding these resources for more tips on managing vendors and handling bills:

 

 

Stay in touch if you have additional questions about reimbursing employees who paid business expenses on behalf of the company. I look forward to hearing from you soon. Take care.

1 reply

J
JamaicaAAnswer
May 22, 2023

Good day, @JZ-22. 

 

I'm here to get you on the right track toward reimbursing the bill payment of your employee for the company. In this method, you no longer need to create a purchase order and split payroll in QuickBooks Online.

 

Since this is money that your business owes from an employee and will be paid at a later date, you can create a bill. To ensure the process is a breeze for you, follow the steps below:

 

  1. Go to the + New button.
  2. Select Bill under Vendors.
  3. Enter the necessary details, then click Save and close.

 

After that, use a journal entry to ensure there's no money posted on the business bank. We will then apply this to the bill you created above. Thus, it will be marked as paid.

 

Here's how:

 

  1. Go to the + New button.
  2. Select Journal Entry under Other.
  3. Ensure to debit Accounts Payable and credit the Liability account.
  4. Proceed to the + New button again and choose Pay bills.
  5. Locate the JE you've made, then press Save and close.

 

Once done, create an expense transaction to reimburse your employee. Just navigate to the + New, then select Expense. Choose the correct vendor and pick the Payroll Liabilities you used on the JE.

 

 

Navigate to the Expenses page and locate the supplier on the Vendors button. We can review the entries to check if they're recorded correctly from there. The zero amount on the Open and Overdue on your vendor's profile indicates that we successfully linked the transactions together.

 

 

As for the taxes and accounts affected, it's best to consult with your accountant. They can guide you on which action to take to record these transactions correctly.

 

Utilize this guide if you use your cash to pay for your business needs: Paying for business expenses with personal funds. It involves using journal entries and checks or expenses to reimburse the money.

 

I'm adding these resources for more tips on managing vendors and handling bills:

 

 

Stay in touch if you have additional questions about reimbursing employees who paid business expenses on behalf of the company. I look forward to hearing from you soon. Take care.

    J
    JZ-22Author
    May 22, 2023

    Thanks for your response.

     

    I want to add the expense/bill to the vendor so  I can keep track of how much we spend there. So if I create an expense for the employee how would that connect to the vender?

     

    Lets say it was $100 at Amazon and the employee paid for it with his credit card.

    I am going to reimburse the employee through payroll (ADP not QuickBooks.)

     

    I want to show in QBO that a 100 purchase was made to Amazon and paid for by the employee. Since I am not cutting a check from QBO and paying through ADP payroll, I am not sure how to document that.

     

     

     

     

    JaeAnnC
    JaeAnnC
    May 22, 2023

    We appreciate your response, @JZ-22. My colleague will update her answer on how to record a company expense paid by an employee in QuickBooks Online (QBO). However, let me provide a rundown of the procedure.

     

    Let's start by creating a bill to keep track of the costs you paid to a vendor. 

     

    Next, make a journal entry to ensure there's no money posted to the business bank. Credit the liability account and debit the Accounts Payable. However, I still advise consulting with your accountant to choose the appropriate accounts to utilize and how to keep them organized.

     

    Once done, apply the journal entry as a payment to mark the bill as paid. Then, reimburse the employee by adding a non-taxable item when you process payroll.

     

    I'm also sharing an article if you need to run reports to get insights on the products you buy and sell: Use reports to see your sales and inventory status.

     

    Let me know whenever you need additional assistance managing your expenses in QBO. I'll be more than willing to help you. Keep safe, and have a great rest of the day!

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