How to handle invoices with expenses that also have associated returned items

Question

I often buy supplies for a job and then I return anything I didn't use.  When I am making an invoice, I want to add the expenses to the job, but I'm not sure how I go about doing this as the final amount listed on the invoice needs to reflect the initial purchase amount minus the refunded amount, but only show one line-item (i.e. Parts).  I tried marking both the expense and the refund as an expense, and I'm able to select those expenses when I'm making my invoice, but then it combines them into a line-item called "reimbursable expenses" on the invoice, which makes no sense to the client.  Is there a better way to handle this?

Thanks!

Mike

msoultan · Answer

Are you saying that you provide the purchase receipt to the customer? And, if so, presumably the refund receipt also.

So, I do not want to provide receipts to the customer.  What I do want is a line-item that says "Parts" and there is an amount associated with that line-item.  If the total cost of the parts was $100 and the refunded parts came to $50, I would just show parts for $50.  Ideally I'd like that to be calculated automatically.

Why does EVERYTHING on the purchase need to be included on the customer invoice? VS just what you used on their job?

It's not my intention to include everything - I actually only want the customer to see the final cost for parts without any details.  What I do want is that the invoice is associated with the two expenses and then it automatically calculates the parts total.

So here's where I'm a bit fuzzy on how this all works because I'm just starting with Quicken.  My assumption is that marking these transactions as expenses designates them as a business expense so they don't count as income?  Or is that done purely based on the category?  In other words what's the point of marking a transaction as an expense to be included in an invoice if it'll already be handled as a business expense and written off anyways.  I couldn't find a whole lot of documentation explaining on the purpose of marking transactions as expenses other than so you can include them in your invoice.

Ideally I was hoping that I could mark all of the purchases and associated refunds as expenses, associate/link/match them to the invoice, and then it provides me an easy reference if I ever need to pull up the invoice and match it to any receipts associated with that invoice - kinda like how you can click a deposit transaction and have it take you to the associated invoice.  Obviously I can scan the receipts and add them as attachments to the invoice so at least I have that as a reference.  I don't know what the ideal method is here.

NotACPA · Answer

Are you saying that  you provide the purchase receipt to  the customer?  And, if so, presumably the refund receipt also.

Why does EVERYTHING on the purchase need to be included on  the customer invoice?  VS just what you used on their job?

If you're providing both receipts,  simply don't include the returned items on  the customer invoice.  It's actually quite simple.

msoultan · Answer

Yes, that is precisely the point - I don't want the client to see anything other than parts, and the associated parts cost should be the final balance of all the associated purchases and returns.  And when I'm creating the final invoice and linking expenses, I need to include all expenses because were I to only link the initial purchase and not the refund, then the total wouldn't add up to the amount that the client should pay.  Now, if you're implying that I only invoice them for the initial parts receipt and either keep the rest of the parts or return them and keep the money, I could do that, but I don't think that's right to the customer.