Relating accts receivable and expenses account

[Mike or Penny Novack]

>The gasoline is an expense only if the client fails to reimburse the
>money. It is actually a bad debt expense at that point.
>
>Eric...
>  
>
I think that most of the difficulty is the attempt to keep everything on 
one set of books.

In other words, here we have an "expense account" situation (no matter 
who is doing the reimbursing). These transactions need to be accounted 
for BUT (a very big but) as long as situations as described above never 
occur they are not YOUR transactions --- don't ever go onto YOUR books.

In other words, I would suggest that a separate "book" be set up for 
this. When you make a payment out of your pocket (or your credit card or 
your check) on your books that is a liability owed to you (a 
receivable). In the "expenses account" books that's a liability and an 
expense. When you receive reimbursement you clear off this 
liability/receivable.

No, I am NOT actually suggesting a great deal of extra work because you 
do this the same way a "petty cash" account is managed. You don't have 
to enter the individual amounts that you have paid one at a time, just 
the totals for each reimbursement interval or once a month or whatever. 
So you would be entering into YOUR books not every time you stopped for 
gas on company business but the total for the month. BTW -- normally you 
would not have these transactions mixed in with your other credit 
card/check transactions. If you do this a lot, you want separate 
dedicated accounts.

Michael