 QuickBooks Online 2023. Receipts used to reimburse worker or owner paid expenses. Get ready to earn the skills needed to boost your bank books on up with QuickBooks Online 2023. Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as excel practice problems PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. Here we are in our QuickBooks Online test company file using the accountant view as opposed to the business view you can toggle between the two views by going to the cog up top and switching the view down below. Let's duplicate some tabs so we can put our financial reports in them right clicking the tab up top we're going to duplicate it right clicking the duplicate a tab to duplicate it again back to the tab to the middle as the right is thinking going down to the reports on the left hand side we want to open up one of the favorites that being the balance sheet and then we're going to tab to the right and then we're going down to the reports on the left hand side this time the profit and loss otherwise known as the income statement closing up the hamburger scrolling up changing that range from 010124 tab 123124 tab and running it that's January to December 2024 let's go to the tab to the left scroll up to the top close up the hamburger and change that range from 010124 tab 123124 and we will run that one as well to refresh it let's go to the tab to the left we've been working on our receipts let's find those receipts on the left hand banking side we're on the receipts all the way then to the right now in prior presentations we thought about how to get the receipts uploaded we made some mock receipts to upload into the system which we now have down below in the for review area we added some receipts and we first thought about those receipts that we could add and match to the items that are coming through the bank feeds as it clears our checking account however we might have situations which we want to touch in on now where the receipt isn't going to tie in exactly to the bank fee transaction as it goes to the bank feed possibly we're going to be using the receipt in order to create a transaction in order to tell us what the transaction would be so for example if we had a contractor or an employee that had some expenses and we said we're going to reimburse you for whatever expenses you have give us the receipts we will then reimburse you well then when we get the receipts that's going to be the indication for us to then create the transaction it's not going to be the something that's going to come through the bank feeds for us to automatically match out another example of that would be if for example we have a sole proprietor situation and we are we are out and about and we want to make a purchase that's a business related purchase but we make it with our personal account so we make it with our personal credit card or with cash it's our personal cash or something like that and then we might want to snap a receipt of the image and pull that into our QuickBooks file and at that point I would have to use that receipt in order to record the expenses so I have it in there for taxes and everything so I didn't pay it with the business account so it's not going to go through the bank feeds on the business side but I need to pull it into my QuickBooks system that's another thing I can imagine that we would be using the receipts for so let's go to the the receipts tab on the right hand side now we'll talk about how to get this information from yourself or possibly from other people like a contractor using the manage forward email and the app later so obviously the app can help us just to upload the information into the system and if we have multiple people like contractors or employees we can use this kind of email address method to do that so we'll get into that later let's now just focus on the idea that we have these receipts in the system and we basically need to record expenses related to these receipts so let's take a look at this this office this depot one again right so we got another receipt that we uploaded in a prior presentation here's an image of the receipt now instead of uploading it as a receipt which would basically if I recorded it on this side would make like an expense form which we would then you would expect matched to something that clears the bank account we can use the receipt to make a bill so we could say there's our receipt I want to make a bill out of it and the bill is a form that increases accounts payable and the other side goes to whatever account like an expense account that that we're going to be putting in in order for in order to have a reimbursement so the bill adds an extra step however because it goes into accounts payable so we got to make sure that we enter the bill and then we use the bill to write the check or to make to enter the expense form that were to make the actual payment whatever we're going to do at that point so let's say for example we're we're paying let's make a contractor as our vendor let's call them Sam the contractor that we are paying so we're going to say save the contractor payment and we're going to we're going to then enter the transaction date so maybe if this was the receipt and we've received the receipt maybe we review the the receipt at some later points so let's say it was 03 15 24 for example and then this is to reimburse contractor let's say and the due date let's say is 03 20 24 because this is going to enter a bill and this is by the time that we want to pay off the accounts payable and then down here on the description it's got the depot okay but instead of going to supplies we're going to say this when we actually pay this off we're paying off the contractor so we might say contractor contractor so we're paying they're telling us how much it costs or whatever and we're going to pay off the contractor instead of putting it to supplies i'm going to say let's say contractor expense or something it's going to go into an expense form it's going to be expenses contractor so that looks good i'll just say save that tax field uh uh communication it's a it's a contractor other business here we'll do that okay so that looks good now this is just basically going to make a a bill form now if i wanted to to build a client with it we can do the same kind of thing we did before we can make it billable which means we can pull it into a line item on an invoice if we if we needed to do that but this would mirror entering a bill so let's say save let's do save and next and so now it says no matches create create a new expense for this receipt so we are going to create a new expense although it's not an expense form it's going to be a bill form so i'm going to say all right create the bill create the bill and so that mirrored in essence what we would do if i hit the plus button up top and basically just made a bill so we would enter a bill looks like this same form as an expense form except instead of decreasing a checking account or a credit or increasing a credit card account liability it's going to be decreased it's going to be increasing a payable a liability so let's see what it looks like if i close this out and i go on over to my balance sheet and run it now we've got in our liabilities this accounts payable so if i go into my accounts payable there's our bill and if i go into that bill that was created from the receipt there's the bill that we created from the receipt i can close that out and go back to my report the other sides on the p&l the profit and loss so now we we didn't put it into supplies this time we put it into you know contractor expense because we're reimbursing the contractor they bought supplies we we're going to pay the contractor according to whatever deal that we have that's going to be the idea now then of course when we make the transaction we're going to actually have to pay them and so now we can go over here and say we're going to we're going to pay off the contractor which i could do by saying uh a plus button up top and enter and uh a payment form a bill payment like this which is in essence a check form and then check off that i'm going to be paying uh sam uh to record the transaction so here's going to be the payment this would be decreasing the the uh the checking account and the other side is going to be decreasing the accounts payable account so it's kind of a two-step process so now you're going to be paying them and if you're paying them out of the checking account you you're gonna you could actually print the check here or something like that where you might have an electronic transfer or something like that that you're paying them but now you're doing this accrual step so as you pay them the 206 06 however you do it if it's an electronic transfer or something like that we can actually record before we do the bank feeds it into the system as a pay bill form here which will then record it as a decrease to the checking account and then when it clears the bank feeds we can match it uh to to with with with this form so i'm going to say let's uh let's say we're going to say save and close we matched it here and let this should be in 24 let's say it happened on uh 0 0 3 24 24 so let's say that's when we were and let's say we didn't actually write a check but maybe we did an electronic transfer that is going to go through will that allow me to do it save and close okay and then if we go into our our banking it would eventually you know clear the bank once we have that electronic payment that was that we just uh recorded manually cleared the bank then it would come through to the bank so we recorded these transactions that kind of matched up uh exactly to the receipt but if i enter see this one has a a match one match found and it's matching up the bill now so now it's matching up this bill so that's how you can you can kind of format that so if you wanted to use the receipt to then enter the transaction generally you probably want to go through that accounts payable system so you get the receipt you say you give me that i'll reimburse you you create a bill with it and then you want to actually generally uh pay the bill and then when the payment goes through the bank feeds you could match the pay bill here that you've already recorded it right in other words if i go to my balance sheet when we paid the bill the accounts payable went back down so i already recorded the decrease to the accounts payable so it went up and went back down and then the other side if i exit this out goes into the checking account so if i go into the checking account uh and we say that that there was the check that's going out of the checking account so if i go into that check there's the bill payment now that bill payment once it clears the bank if i go back on over and exit and say once it clears the bank it will then should match out it should most likely be able to find that bill based on the amount and the date and and tie it out and so then we can just say match no new transaction happening at this point in time we're just matching it out so that's one that's one scenario that you can have with a contractor and employee uh you might or you know some reimbursement type of situation you can imagine using the receipts for that now if i go back on over to the receipts another way that you might have the receipts or use the receipts is if you are sole proprietor and you use your own you're trying to separate your business account from your personal account and you do but you do something where you are where you use your personal money to pay for a business expense and you want to take a picture of the receipt so that you can put in your expenses for your taxes and whatnot so let's imagine for example that we have this one let's just go into this one here and we're gonna say all right this was the restaurant now this was a business meal this is a very important business meal that we had but we pay for it with cash that was personal or for with my personal credit card so i take a picture of the receipt and with my app or whatever and then i put it into quickbooks and now i need to make a transaction i can't match it to the bank account because i didn't pay it with my bank or my business credit card i paid it with my personal credit card or cash or my personal side so now i have to add it to my books so what's the transaction that that needs to happen here well if i'm going to call this meals and entertainment that was business i need to have an expensive meals and entertainment and the other side would have to go you would think like to draws right because i'm because i'm reimbursing uh you know myself myself or it could go to you know it's the it could go to an equity account right because uh i paid it personally so i could put it directly to an equity account so that's one thing we can do so in other words you might one way you can do this is you can say okay i'm not going to create maybe you don't want to create a bill with it maybe you don't want to reimburse yourself or make a financial transaction you're just going to say i'll just make like a journal entry uh with it so if you made a journal entry with it you'd say i got to increase the expense account and then so let's say it was for 46 58 the journal entry would look something like this uh it would be like the account would be meals and entertainment entertainment meant or something like that business meals or something it would be an expense side of things it would be an i'm just going to say other business expense meals and entertainment and we'll save it and i forgot what the amount was again but it was like 58 let's just say and then the other side would be going to some equity account like draws now you're actually kind of increasing the the equity account you can call it an investment account but you might have a one equity account that's increasing and decreasing for the draws and possibly the investment so i'm going to net them out in draws so that it's going to be into draws i have home office draw so i'll just call draws in general and then i'll make it to be an equity type of account and then we'll we will put it into uh owner's equity let's say draws with an s maybe and then i will save it and then you might put in the description that this is this is something you paid with personal paid with personal uh account or something like that in the description but notice there's no easy way to attach that receipt this way i mean you've got your attachment over here so if it's on your computer you you can kind of attach it and you're kind of recording something with a journal entry which isn't like the best way to do it often like you kind of like to record stuff with the expense forms or the check the check forms and uh and and the deposits and whatnot so this is one way you can do it which is kind of like the fastest way so if i recorded this i'd say on the balance sheet now i've got my draws which which are actually increasing because i actually paid for a business thing from the personal side so this is kind of like an investment but it's netting out to draws the draws accounts will kind of net out and then the other side it's netting out in your equity account and then the other side is recording the actual expense to uh to the meals and did i put it in the right uh there it is right there but it was recorded with a journal entry and we don't have that we use the receipt possibly to make the transaction but we didn't we we didn't actually use it to build the transaction we use the receipt to know what the journal entry should be and we got it on our expensive report in that way so that we can make our schedule see and have the proper deduction for the expense if it was a deductible item but we didn't really add it with the receipt so the other way you can you can do it is you can say all right well if i had this receipt right here uh i could reimburse myself for it and that way i can have an actual transaction that would go through the bank account and give me that kind of actual physical audit trail and then i can use this receipt to attach uh as i do that so to do that you'd probably want to record this not as an expense form but as a bill and then pay yourself and then and record it that way so you could say okay this is this is going to be a bill to the owner which i'm just going to set up as a vendor and so we'll keep the date there on the bill the memo reimburse owner for business business expense paid out of personal account and then let's say this is 04524 that's a required field and then we'll say the category that uh we're gonna put this to is once again the draws it's gonna go into uh well hold on no the category that it's gonna go to is meals meals and entertainment for 46 so what's this gonna do it's going to increase it's a bill now so it's going to increase the expense of 46 58 and increase the accounts payable which is a liability account just like a bill type of form so let's save and next it hasn't been recorded so i'm going to say create the bill with it now i'm actually going to make a transaction that clears my checking account for the reimbursement so i've had the whole audit trail and i can do that with the pay bill again so i can go here and say now i'm just going to go to pay bill and i'm going to take some money out of my business to the personal account so i have this kind of audit trail so it's so i've got uh my checking account up top and i'm going to say this is on what did i say it was like 420 let's say 24 and let's say it's going to be an electronic transfer and it's going to be the owner so this is going to decrease the checking account and i'm imagining we're actually making a physical payment at this point and it's going from our business account to our personal account and that'll give us this this audit trail that we're looking for so if i was actually writing a check i can i can do it here if it's an electronic transfer then i'll record the transaction and simply just match it when it clears the bank feeds and so i'm going to say okay let's save and close it so now we have the pay bill if i go to my balance sheet now and i run this notice i'm not in this method i'm not actually recording something to the equity side because i actually reimbursed myself i paid myself through the checking account we reimbursed ourselves so now the checking account is actually going down for that pay bill here's the pay bill going down and then the other side properly recording the expense once again to the profit and loss if i run it so now we've got the meals and entertainment so the first method i did with just a journal entry the second method i reimbursed myself and that gives us a more detailed audit trail really and then and then it allows us to attach the the uh the receipt which gives us more a more detailed audit trail that says here's the receipt so obviously when you're transferring money to yourself you know that could be from the personal to the business account and recording it as an expense then that's when you need the audit trail because uh you record an expense for something going to yourself so you'd like to be able to have that image to show that you are you're tracking it in the event of an audit or something like that and then if i go to the first tab and we go to the banking then once again when it clears the bank it should match out to to that uh item that we had so uh it was which one was it so here it is it's the it's the 46 58 so if i go into that one now just like we saw before it it matched it out to the actual bill so this isn't going to make any another transaction it's already been recorded this just helps us to double check doing like a bank reconciliation type of thing that it matched it out and obviously it should match out perfectly because we when we when we made the transaction we did an electronic transfer so for that exact amount on the exact date and it's once it clears the bank it should pull in and we should be able to match it up perfectly and uh and it looks and it works quite well now you could imagine a situation where you're like hey look i don't like the journal entry method because i don't i want to attach it and i don't like this whole journal entry thing but i don't want to reimburse myself because that's the kind of a pain i'll just uh i just want to record i don't want to actually write a check from one account to the other count just for the audit trail so is there any other kind of method for the picky people out there well we could say we could we could do it this way right so here's another method that you could say you could say okay what if it comes through here's another one here this comes through and then we're going to still make a bill out of it but then when i pay the bill i'm going to try to just record it to draws in some way and i'm going to have to use a clearing account to do that so i could say okay this came through i paid we paid for it with our personal money and so i but i still need to record this as an expense and if i just record it as the receipt it'll decrease the checking account uh generally so i could make a bill and pay it with a bill actually let's let's keep it as a receipt and then i'm going to record it what what i'd like to do then is what we did with a journal entry which is mean i want to put this on the books as an expense which is the 35 19 meals and entertainment i want the other side to go to some equity account like draws but it it's going to want to go it's not going to let me go to an equity account generally because it's this is like an expense form it's going to force me to go to like a a either a credit card or a checking account so i could use a clearing account method which is not too difficult you know i could say okay this is going to the owner again owner hold on owner there it is and then and then see here's the accounts that we can impact now let's see if it allows us to just record this directly to this draws account that's where we would like it to go uh sometimes it limits the accounts that we can go to but let's do that let's see if we can do that then we may not even need any any clearing account so that would be nice so we're just going to say it's going to just go directly to draws and this is to re reimburse uh owner expense payment from purse from personal account okay let's see let's do that and then this is going to be going to the category of meals and entertainment again i'm going to say meals and entertainment this was an important business meeting people no funny business going on here this was all business so not funny business either normal like really important business so then we could make it uh remember so let's go ahead and add it and then okay let's make an expense from it see what so so something your so it says check your account details before you continue you may need to select different type of account for your transaction in other words it won't let us go to that equity account it i believe it's going to force us to do a a uh account for see it won't let us go to this draws equity account so we could say all right i can just make a clearing account here let's add a new account and let's call it a bank account and let's call it a uh a a uh draws clearing clearing account account so it's going to be a bank type of account so it'll let us do it and so then it's going to go under bank hold on section i'll just say checking draws clearing account all right okay okay thing let me do it let me do what i'm doing so there we go so now it's going to go to the clearing account which is now a checking account everything else is the same so now let's try it see if it gives me some red dot no so there we go so now we had to put it over here and if i go into this now we've got our draws account so it wouldn't let me put it into the draws down here because it wouldn't let me do an expense so i had to put it into a draws here and then i can remove it from here and record it into the actual draws and i don't have to do that i can do that periodically if i wanted to so everything in here should be in essence a draw so if i go into this then now we have the expense form that was created there's the expense form boom we've got this nice attachment to help us to track that the other side if i go back on over is on the profit and loss if i run the p&l and go down to my meals again we had these very important meals we had to write off because it was i mean the business would have shut down if we didn't have that meal it's so important this is essential so uh any case there we have the bill in this one and so it's in there with an expense form looks perfect and we've got the pdf to support the fact that this was super businessy and then go back and then what we would like to do is at some point we'd like to transfer the amounts out of the clearant account and then down to the the draws account and we we could do that with like using a deposit form because this is actually shows like a negative checking account but it's not actually a checking account it's just a clearing account so i could use a deposit form to increase it back to zero and the other side going then to the draws or some equity account down here or we can put it into or i can use a journal entry so let's just use a deposit form so i'm going to go back here and hit the plus button and let's make a deposit form and then the key is that up top it's not going to be the checking account we're depositing into we're not actually making a deposit we're clearing out that draws account that we're going to do periodically for 25 uh let's keep it at that and then we're going to say that the account the other side is going to go to that draws account that's where we want to go which is making a journal entry to the draws uh reduce clearing account for expenses paid from personal account all right and then the amount is simply going to be whatever's in there 35 19 3519 35.19 and that should do it all right so let's save it and close it and check it out so i can go to the balance sheet and run it back and there's the clearing account so we've got this clearing action happening happening in the clearing account it goes up it goes back down you don't have to do that every time you put something into this clearing account you might clear it out uh monthly or something like that uh you know just to because this account is just an account we would like to have put as an equity type account but couldn't because of the way the expense form is set up through the receipts so everything is washing out here properly and then we can just put it to the account we want it to go to periodically at the end of the month or the year down into draws so it went in to draws and these are actually kind of more like like an investment because we paid something out of the personal account so that would be kind of like the owner gave the company money and then the company paid it that's what should have happened right the owner put money into the business and then the business uh paid the money so that would be the the investment from the owner so the reason i put it in here as draws is because likely what happens periodically is you take money out of the business for personal use so the payments that you make on your personal side will net out against the draws the money you're taking out of the business for personal use so this will be the net draws which you would expect to be you know neg you know a decrease to equity over after everything is said and done the money that you took out for personal use is going to be a draw minus the money that you gave to the business in the form of business expenses that you paid with your personal side and so that'll net out that's why i'm using the draws all right so that's that's the general idea