How do I record a payment from a client for a reimbursement expense? When I try, it defaults to service income. I'm a newb.

Thanks for reaching out to us, Matt. I'm here to share insights into why reimbursable expenses are defaulting as an income in QuickBooks Online (QBO).

When recording a reimbursable expense in QBO, it posts as an income since you are charging your clients for the services you incurred on their behalf.

If you haven't yet, you'll have to create an invoice and mark the line items as billable so your client can reimburse them. Once done, here's how to record the payment:

1. Go to + New and select Receive Payment.
2. From the Customer dropdown, click the name of your client.
3. Select the Payment method.
4. Choose the account you put the payment into in the Deposit to dropdown.
5. In the Outstanding Transactions section, tick the checkbox for the invoice you're recording the payment for.
6. Enter the Reference no. and Memo if needed.
7. Click Save and Close.

Moreover, you can combine all the payments you deposit into a single transaction by utilizing the Undeposited Funds account.

Keep in touch if you have other concerns about recording payments for reimbursable expenses in QBO. The Community team is here to help you. Stay safe.