Does anyone have a suggestion on how to reimburse employees for out-of-pocket expenses?

In the past we have setup liability accounts for each employee and the cost incurred by the employee for an item would go into that account. We accomplished this by using a GJ entry to credit the liability and debit the expense account (e.g. office supplies). And then periodically we would write a cheque to the employee to reduce that liability and reimburse the employee.

This approach works but I would prefer to use the Cheques or Credit Card Charges interface instead of the GJ entry. Also, it always struck me that my approach was too cumbersome and there was probably a simpler way to accomplish this. Is there?

Thanks!
Doug

There are a few ways of doing this in QB.
1) Just use the “Write Cheque” window and write a cheque (separate from their regular paycheque) to your employee for those expenses. You can the use the account column to itemize the different expenses and use the tax column to claim the GST or HST (and PST depending on your province).
2) If you want to pay your employee on their paycheque you need to set up a payroll item called something like “Reimbursed expenses”. Set it up so that it does not include in the payroll calculations, on T4, or ROE. You will then be able to use it directly on a paycheque in the “Other Payroll Items” section. The only limitation is that you can only assign one expense account per payroll item. So if you reimburse many different kind of expenses you will have to set up one payroll item per expense. Otherwise you can use a generic payroll item.
3) If you want to accumulate the expenses over time in a liability account you can create a Credit Card Account for each employee. You can even create a parent account with each employee as a sub-account. Enter each expense as a credit card charge to the appropriate employee. When you are ready to reimburse the employee just make a cheque and post to the employee name credit card account. Or you can set-up a payroll item as explained in #2 but make it point towards the employee name credit card account. Each specific payroll item then would be used for only one employee.

Michael R. Malo
Certified ProAdvisor and Educator

Visit http://www3.sympatico.ca/mrmalo for French training on QuickBooks in Québec.
Visitez http://www3.sympatico.ca/mrmalo pour de la formation sur QuickBooks partout au Québec.

Thanks for the excellent answer. That gives me a few options to work with.

Thanks!
Doug

The problem I have with this solution (which is by the what I do)is that when set up as addition on a pay cheque these reimbursements do not calculate to box 14 which is correct.
But they are included in the gross payrool for the PD7A which is incorrect - any ideas
The option of setting up reimbursement of expenses as a credit card account works great but does create more entries and cheques but avoid the above problem.

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