I need to reimburse my employee for their phone and travel expenses. These expenses are rebilled to the client. So far, I have created 4 purchases in the system
purchase 1 - phone - say £10
purchase 2 - broadband - say £5
purchase 3 - travel - say £15
purchase 4 - employee reimbursement - £30 (total of purchase 1,2,3)
I have re-billed purchase 1,2,3 to client. The purchase dashboard is showing 4 entries (one for each of the purchases mentioned above) and they all are marked unpaid. If I mark all of them as paid, would it create a double entry as if I mark all of the expenses as paid, wouldn’t the total paid become £40 while it should be only £20? Am I doing things the right way?
You record a purchase either for the original items you bought from your suppliers or for the amount you reimburse the employee, not both.
If it’s all expenses that would be exempt from P11D reporting (I believe the ones you mention would be but ask an accountant if you want a definite decision - travel will be but broadband might not) then the simplest approach is to set up a dummy bank account for “employee expenses”, mark the purchases from the various suppliers as paid from that, and when you repay the employee then that is just a bank transfer to the “expenses” bank account.
If you’re paying expenses back as part of payroll then you could include it in your payroll journal by putting a line to debit £30 to the expenses bank account and add an extra £30 to the “net wages” credit line.