Can you get invoices to use other than an Income Account?

[Maf. King]

On Tue 1 October 13 20:28:07 Jon Dallara wrote:
> Hello,
> 
>    I work for a company as an independent contractor.  As such, the
> company purchases the materials needed to complete a job and I bill the
> company for the hours I worked.  I use an invoice to do this using the
> Income:Sales account.  On occasion, I have to purchase materials out of
> my pocket for which I get reimbursed.  The invoice insists that I
> provide an Income account for the entry so I use Income:Reimbursed
> Expenses.  This has the effect of artificially increasing my Income and
> thus my checking account when I'm actually using my money over and over
> again.  There is no net increase as the account summary shows.
>    From what I know, there should be an account Assets:Reimbursed
> Expenses Receivable of type A/Receivable.  The amount of out of pocket
> expense is credited to the asset account.  When the invoice is paid, the
> asset account is debited and returns to zero when all expenses have been
> reimbursed.  This is what happens to the accounts receivable account
> when an invoice is paid.  Currently, the only work around that I have
> been able to figure out is to create a transaction in my checking
> account account to withdraw the money for the purchase, so that when the
> invoice is paid, the Income:Reimbursed Expenses amount is zeroed out.
> This has 2 side effects, it shows income that I didn't earn, and
> secondly, it shows the purchase as for myself and not as part of an
> invoice unless I remember to make a very detailed entry for the transaction.
> Is there any way to get the invoice to accept the Assets:Reimbursed
> Expenses Receivable account?  Is there another way of doing this?  I've
> attached an account summary so the Income problem can be seen.
> 
> Thanks,
> 
> Jon.


Hi Jon,

I understand your problem - but I think that you are going about it in 
(mostly) the right way.  I'm not an accountant, nor do I know which tax 
jurisdiction you operate in, so you may want to take professional advice about 
how you are expected to handle such expenses and refunds.

I _think_ that the GC invoice looks at account type, not position in the tree.

How about a new asset account called reimbursables, under which you have an 
income account for reimbursed, and as many expense accounts as you need for 
different projects, clients etc. (I haven't tested this, so good luck!)

As to you checking account seeming inflated, I'm not so sure.  Seems to me, 
that if the total value of the invoice is paid into checking, then it is 
correct to show the reimbursment being in checking too?  Where did the money 
to buy the materials come from when you bought them?  Cash, Credit cadr or 
cheque seem to me to be the most likely options, so they can be easily tied 
back to the checking account balance.

HTH,
Maf.