How to Record QuickBooks Reimbursement Expenses Chart of Accounts

  • January 9, 2024

When it comes to business, employees often use their own personal funds to buy products and goods for the company, which is very common and usually followed regardless of the size of the business. If your employees spend their own money on business-related expenses, expense reimbursement is a way to reimburse them.

To track and reimburse employees, it is important to record the payment.

Recording Reimbursable Expenses in QuickBooks

To record and repay employee expenses in QuickBooks, we will use the Write Checks feature. Here are the steps to follow carefully.

Method 1: Expense Account Method/Expense Tab

  1. While recording the expenses that are incurred for customers tap on the tab of Expenses from Enter Bills, Enter Credit Card Changes, or Enter Bills, based upon how the expenses are paid by you. Fill the screen normally as you would do.
  2. Now in the tab of Expense, choose the expense account that is appropriate, and then from the column of Customer: Job choose the appropriate customer, don’t check the column that has the icon of invoice above it, which is also labeled as Billable in QuickBooks later version.
  3. Do not forget to save this transaction.
  4. Then get the invoice generated for the customer and make sure that this transaction is dropped in the invoice after the Time/Cost button is clicked.

Method 2: Cost Account Method/ Expense Tab

  1. Same as Method 1, here also you have to click on the tab of Expenses from Write Checks, Enter Credit Card charges screen, or Enter Credit, based upon the method you will use to pay the expense. Then normally fill the screen.
  2. Then go to the tab of Expenses and select the COGS account. After that from the Customer: Job column choose the appropriate customer. Unlike Method 1, here you have to check the billable column.

Method 3: Method of Items Tab

  1. Go to the Item list and then get the new one, Other Charge item created. Tap on the box that says, “This item is used in assemblies or is a reimbursable charge.” By doing this the item will be set up so that you can effectively use it on the Enter Bills, Write Checks, and Enter Credit Card Charges screens along with the invoice screen of the customer.
  2. Fill in the item having the desired/appropriate COGS account on the left-hand side and also the revenue account on the desired one on the right-hand side. Get all the information filled in as needed.
  3. Fill the item having the desired/appropriate COGS account on the left-hand side and also the revenue account the desired one on the right-hand side. Get all the information filled in as needed.
  4. After that, while entering bills, writing checks, or adding the charges of credit card for the reimbursable expenses, click on the items tab instead of clicking on the Expense tab, to select the item you created just now. Make sure that the correct amount is filled and then do not forget to highlight the transaction as the reimbursable expense on the right side. Then save this transaction.
  5. When you are invoicing your customer, tap on the button of Time/Costs and after that click on the tab of Items. An item will appear, and as soon as you select it, QuickBooks will place it on the invoice of the customer. Then add the sales price along with other information. Make sure that this transaction is saved.

Record Reimbursed Expenses in QuickBooks for Future Payments

Record expenses as Journal Entries and pay employees later at the end of the month if you wish to record expenses for future payments.

  • Click on '+New' in the top right corner and then select 'Journal Entry' to enter employee reimbursements.
  • Create an account for tracking the amount you owe the employee, for example, 'Employee Reimbursement' on the first line.
  • After that in the ‘New Account’ window, select the account type as ‘Other Current Liabilities’.
  • Enter the reimbursement amount you owe the employee in the Credit field.
  • Enter the account that employees used to purchase goods and products on the second line.
  • After that, enter the amount of purchase in the ‘Debit’ field.
  • When you have reviewed all the information last time, click on 'Save' after entering the customer's name.

How To Track QuickBooks Online Reimbursable Expenses

These expenses include travel or hotel bills, goods, and products purchased for the business. Employees can claim these expenses later on.

For this reason, it's important to keep track of reimbursed expenses in QuickBooks. You can do this by using the expense account.

To track these transactions successfully, follow the steps below carefully.

  • Log in to QuickBooks using the administrative username and password.
  • Select the 'Preference' option from the drop-down menu at the top of the menu bar.
  • Select 'Time and Expenses' in the Preferences window.
  • Choose the 'Company Preferences' tab in the next window.
  • Check the box that states 'Track Reimbursed Expenses as Income', then click OK.
  • Now that you have enabled reimbursement expense tracking, you can select this option for all expense accounts.
  • Using the menu bar at the top, select 'List' and then 'Chart of Accounts'.
  • Then, select the expense account for which you would like to enable tracking.
  • Select the 'Account' button at the bottom of the list, and then select 'Edit' from the drop-down menu.
  • In the Edit window, checkmark the box stating ‘Track Reimbursed Expenses’.
  • Finally, select the account to track reimbursement expenses and income.

Issues Commonly Faced by Users

What is the ‘Reimbursed Expenses’ Account type on the Chart of Accounts?

For example, you are trying to record the payment to backtrack to get the taxes completed. Expenses were paid by the company and then they passed it directly to the client by including the GST amount, appropriate.

Now, you wanted to know whether you have to create an account for reimbursed expenses. What is going to be the type of this account? When the payment of the invoice will be done then whether the client disbursement or reimbursed expense too was credited to the reimbursed expenses? You are now looking forward to help with how journal entries could be entered. The invoice module is not used by you currently. Will client disbursement consider the income also?


We've covered all the topics on how to record and track employees' reimbursed expenses in QuickBooks. Keeping track of reimbursement transactions is an essential part of managing a business or company's finances.

Issues that are discussed here could be even more complicated or maybe you are unable to specify them and mix up the things. No matter what the situation is, the SMB QuickBooks technical support team will always lend a helping hand to you. Get instant LIVE CHAT.

Frequently Asked Questions

What type of account is reimbursed expenses in QuickBooks?

Since your deposit and reimbursement are not business expenses or income, you can categorize them as Transfers.

What type of account is reimbursable expenses?

An expense reimbursement account is a contra-expense account with a credit balance rather than a debit balance. It is used when a business makes an initial payment for an expense and is then reimbursed for it by a third party in part or in full.

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