stop reimbursable payments from showing as income

TonyTony Member
edited October 2018 in

We have a real estate office. Some items we have to pay and then get reimbursed by the agents. I send them a bill and they repay it. But some of these show as income and others as back to the original charge. Why are some being reported as income?

Comments

  • Howard RoarkHoward Roark Member ✭✭✭✭
    edited August 2016
    Based entirely on the information in your problem description, I'd say you forgot to click the "Do not show reimbursable payments as income" button.

    Said another way: your problem description is lacking much in the way of useful evidence to diagnose the problem.

    There is nothing describing how you record your transactions; nor any description about the difference between the transactions that "show as income" and those that don't. Nor any information about how you determine that some "show as income" and how you determine that some don't.

    Your phrase "some show as income and others as back to the original charge" seems tantalizing close to not only providing an accurate problem description, but actually providing the answer ... but how can we tell.
  • TonyTony Member
    edited May 2018
    There is no "Do not show reimbursable payments as income" button on my copy of Quicken. If there is, where is it? I enter the transactions by clicking the "receive customer payment" section. And what I was trying to say, is that some of these are not added to income, and some are simply added back to the original expense. Hope that helps.
  • Howard RoarkHoward Roark Member ✭✭✭✭
    edited August 2016
    "There is no 'Do not show reimbursable payments as income' button on my copy of Quicken".

    No there isn't, as I implied in my following sentence ... when I referred to that non-existent button, I was being sarcastic regarding the lack of useful information in your problem description.

    The basic process for reimbursable business expenses is: mark the expense transactions that are reimbursable as such by clicking in their "Expensed" column; then when it's time to recover those expenses, you add them to an invoice by clicking on the "Expenses" button at the foot of the invoice and selecting which "Expensed" transactions you want included to the invoice.

    In my tests, all the reimbursable expenses included in my invoice are on separate invoice lines and each reimbursable line item has the same category as the original expense transaction. Those lines basically represent negative expenses.

    The portion of "income" from the invoice, related to the reimbursement (the negative expense), is offset by the positive "expense" already incurred by the "Expensed" items ... so there's no net income or expense.

    You still have not mentioned what you are looking at that tells you that some reimbursed expenses are being treated as income and some not (and how are the ones not being treated as income being treated) ... nor how the different treatments are categorized.
  • NotACPANotACPA SuperUser ✭✭✭✭✭
    edited October 2018

    Create an "Accounts Receivable" account.


    When you pay an amount, for which you expect reimbursement, DON'T post it to an expense category ... instead show it as a Transfer to that AR account.


    THEN, when you're reimbursed, show the money as coming FROM the AR account.


    Lastly, in reports, "Exclude Transfers" on the Advanced tab of the Customize icon dialog.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • TonyTony Member
    edited May 2018
    Looking at the Profit and Loss report. The first section of that report is Income, and that's where some of the payments are showing. But the others are showing in the expense section as a positive, thus offsetting the expense. For example, if the original expense was $1,000, I have to pay that usually within 30 days. Then, I send a bill to all our agents and they will pay me back over time and most of those are recorded as a positive to that bill. Using the $1,000 as the example and I bill the agents $100 each, the expense will be MINUS $1,000 but the payments will be POSITIVE $100. If I received 8 payments the net expense would be $200. But some are not posting against the expense. Make sense? What else? I have been using Quicken since the first edition, but am new with the Home & Business version. I previously used QuickBooks for business.
  • Howard RoarkHoward Roark Member ✭✭✭✭
    edited August 2016
    "The first section of that report is Income, and that's where some of the payments are showing".

    Invoice payments are not income - they're just transfers from the invoice account to the payment deposit account. Invoice income only comes from the individual invoice line items.
    If you're reporting on the accrual basis, the invoice income will be reported when you record the invoice.
    If you're reporting on the cash basis, the invoice income will be reported when the invoice is paid.
    [See the Advanced tab of the Customize dialog to determine which basis is being used.]

    The reimbursed items in the invoice ARE income (negative expenses).
    But I do not see any of those reimbursed invoice items in the P&L report income section.
  • NotACPANotACPA SuperUser ✭✭✭✭✭
    edited October 2018
    "The reimbursed items in the invoice ARE income (negative expenses)."  This sentence contradicts itself.  If it's a negative expense, it's not income.  It's positive cash flow, but the OP isn't any wealthier after the reimbursement ... a asset has just been transferred from the Receivables account to the bank account.

    Reimbursable items should be posted to an AR account ... not as expenses.  Failure to do this is the root cause of the issue.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • TonyTony Member
    edited May 2018
    Thanks for your input. Wonder why some are in the right place, but others are not? The expense goes in as something to be paid, and the reimbursement should be a negative entry against that charge. If I am charged $100 and later get a reimbursement, the balance should be zero.
  • NotACPANotACPA SuperUser ✭✭✭✭✭
    edited October 2018
    Because you're using Expense categories ... and not an AR account.  If you expect to be reimbursed ... IT'S NOT AN EXPENSE!
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Howard RoarkHoward Roark Member ✭✭✭✭
    edited August 2016
    "The reimbursed items in the invoice ARE income (negative expenses)". "This sentence contradicts itself".

    You're splitting hairs.
    A negative expense acts like income.  
    It works "similarly" to a contra expense account - offsetting the original expense.

    Your purchase of a new television looks like a (personal) expense ... until you return it for a full refund and record the refund transaction. But even after both transactions have been recorded, the tv purchase still acts like an expense and the refund still acts like income ... but you're not any wealthier after the refund.

    "Failure to do this is the root cause of the issue".

    Based on my tests, that's not the issue. Quicken handles it correctly, regardless of whether you record the original expenditures as expenses or transfers to an asset account.
    I find no inconsistency as reported by the original poster.
  • NotACPANotACPA SuperUser ✭✭✭✭✭
    edited October 2018
    That's NOT splitting hairs.  It's accounting.  Saying something is both Income and and Expense (even if negative) is an oxymoron and self-contradictory.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Howard RoarkHoward Roark Member ✭✭✭✭
    edited August 2016
    Wow: I'm shocked it took you this long to respond. :smile:

    Like I said in my previous post: "A negative expense acts like income". Same algebraic sign, same effect on the "overall total" in the Quicken P&L report.

    How does your hair splitting advance the cause of getting an answer to the original poster's question - which was "Why are some being reported as income". {An answer, which I confess, I do not have ... how about you?]

    The op has posted nothing that would suggest that some of the reimbursable expenses were posted as transfers to an asset account, while others were posted as expenses.  
    So, it you take the op's posts at their face value (all reimbursable expenses were posted to expense categories), how could the failure to record the original expenditures as transfers to an asset account explain the inconsistency? If all the transactions were recorded the same, then the "transfer to an asset account" notion can't explain the problem.

    If the op were using Q2015, I could pretty much reproduce the issue of this discussion as I understand it.
    There has been a long standing Quicken confusion based on the user assigning a tax line item type to a category, that conflicts with the category type: such as assigning an income tax line item to an expense category.

    In several (many?) of the previous versions of Quicken, when an income type tax line item was assigned to an expense category ... Quicken would report the expense category in the income section of (at least some) reports. Likewise for the inverse.
    I only remembered that late in the course of this discussion, so I had not taken it into account in my posts before my previous response here.
    Sadly, while I can still reproduce the problem in Q2015, I can not reproduce it in Q2016.
    The good news appears to be that Intuit has "fixed" the mixed category/tax-line-item problem: the bad news is that it doesn't appear I can provide any insights into the original poster's problem.

    [By the way: I was not objecting to the notion of recording the reimbursable expenses as transfers to an asset account - only to the notion that, failure to do so address the original question. Further: I can imagine legitimate reasons to want the original expenditures recorded to legitimate expense categories, for the potentially useful information that might provide. I believe that Intuit intended Quicken to be able to handle reimbursable expenses as the original poster has apparently been trying to handle them.]
  • NotACPANotACPA SuperUser ✭✭✭✭✭
    edited October 2018
    How about because transfers are easily excluded from reports.  How about because it's proper accounting.
    And, it took so long to respond because I had other things to do until about 4pm
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Howard RoarkHoward Roark Member ✭✭✭✭
    edited August 2016
    "How about because transfers are easily excluded from reports.  How about because it's proper accounting".

    Sorry, neither address the problem, or my comments.
    I suggest you re-read the previous posts.
  • NotACPANotACPA SuperUser ✭✭✭✭✭
    edited October 2018
    Using an AR and excluding transfers completely addresses the OP's issue.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Howard RoarkHoward Roark Member ✭✭✭✭
    edited August 2016
    "Using an AR and excluding transfers completely addresses the OP's issue"

    The problem, again: "Why are SOME being reported as income?" [Emphasis added.]

    Your approach does not explain why "some are being reported as income", why there is an inconsistency in the way Quicken handles the op's situation: your suggestion simply removes all those transactions from view.

    Obviously removing the inconsistently treated transactions from reports will prevent the inconsistency from being seen.
    But it doesn't address why the inconsistency occurs.
    Some users may want to examine, and report on, the categories of the items for which they get reimbursed ... and using a transfer will make that considerably more cumbersome.

    I believe the process should work (not produce inconsistencies) without using transfers and without removing the transactions from the report.
    But if removing the transactions turns out to be the only way, I think there is a different approach that will permit using categories to identify what the expenditures were for, so they can be easily reported/analyzed.
  • NotACPANotACPA SuperUser ✭✭✭✭✭
    edited October 2018
    If the OP isn't going to chime in on this ....  I'm dropping out also.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
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