Accounting & Bookkeeping & Small Business Forum

[lexysmith]

Hello - I'm looking for help to overcome a brain drain...
My new client is a trainer, she bills the companies she works for as part fee and part expenses which she has already paid out.
Do I account for this as follows:

Expenses paid out:
DR Expense accounts
CR Bank/ cash book

For each invoice sent:
DR Client account - total amount payable
CR Sales with fee only (income)
CR Recoverable expenses with the expenses owing (other income)

and then when invoice paid:
DR Bank
CR Client account with full amount

This seems to balance but I'm not convinced!
Thanks in advance!

[Ken]

From what you have said it seams to work.

[RobJ]

lexysmith wrote: CR Recoverable expenses with the expenses owing (other income)
I don't disagree with this point. For me, it all depends on the reporting. If the client could care less about getting a report with the fee income and the expense reimbursement listed separately, then I'd lump it all into the same income account as the fees. I'm generally about providing useful reporting and there is some merit to separating them.

That said, it is correct.