How to tag business rip expenses, reimbursed by client

Accounting
1

I made on overseas business trip to Italy and incurred some expenses (Travel, meals and hotel) that I will be reimbursed by the client when invoiced, however I am not sure how to tag them in the banking feed, should i tag them as general expenses or overseas Travel / meals /accommodation?

2

Hello @gary_barrett

There is a feature to rebill clients for expances which you may find useful for this.

3

Thanks for the advice and links for rebilling, very useful. In the banking feed, can I tag all expenses for rebilling as general expenses or should I tag rail tickets as overseas travel and meals as general purchase?

4

Hello @gary_barrett

As the support team are not registered accountants we can not advise on what codes to specifically post your transactions to.

I would reccomend speaking to your accountant, I will however leave this thread open for no as there are accountants on the forum who may comment.

5

I am not an accountant, but from my understanding of your query and how the system handles different categories of account, I think you will want to keep this out of your overheads as it is not a fixed cost, but a cost arising at the request of a client.

According to this page:

https://support.quickfile.co.uk/t/nominal-account-categories/8864

Purchases
Use this category for items that will be purchased and resold in your business or used to render services to your clients.

Such items can include building materials (for construction workers), stock items, and other outsourced services.

Expenses
Expenses are direct costs to your business that enable you to promote and fulfil your services.

For example, advertising and marketing, sub-contractor fees, sales commission, etc.

I think putting such categories (i.e. Overseas Travel, Overseas Subsistence) under Expenses would be the most appropriate.

I think you may well want to split the costs if you want to report on the different parts of your trip either internally, in your accounts, or to your client.

These would be different from Overseas expenses if you, for example, went to a conference in Germany either to promote your business or to learn and/or network in order to strengthen your business; these would be Overhead expenses.

6

A lot depends on how big your business is, if you’re a sole trader or limited company, if you’re VAT-registered, …

If you’re VAT-registered, you need to remember to add VAT when you re-bill the client.

As for where to put them, it depends on how much detail you want in your accounts, and who will be looking at them. If they’re just for you because you’re a sole trader, put them wherever you find easiest. Personally, I would put them all to overseas travel as that’s what they were for. It’s best to leave general expenses for smaller one-off items that can’t easily be categorised as something else.

If your accounts have to be submitted to Companies House, or to a bank because you’re trying to get a loan, then I would include them as “direct expenses” (not cost of sales) as they are directly related to the service you have provided your client. I would still classify them as travel but you can add a new code in the Direct Expenses range if one doesn’t already exist.