Billable Expenses 1a

Lets say I buy $55 worth of fuel (50 + 5 GST) on a customer job.

I invoice the customer for goods or services and the $55.
What I have been doing is invoicing the 50 plus 5 GST.
So I get paid the 55 but have collected $5 get which I pay back to the government, but that means I am out of pocket $5.

So do I invoice for $55 and no GST?

I don’t think you are out of pocket, because you haven’t considered the $5 refund from the government on the purchase. In the below example the 50 & and the 5 cancel themselves out.

The initial purchase is Credit - Accounts Payable (supplier) or Bank/Credit Card/Cash Spend Money.
Debit - Billable Expenses 50 & GST Paid 5 (refundable by government)

Invoicing the Client is Debit - Accounts Receivable (customer)
Credit - Billable Expenses 50 & GST Payable 5 (payable to government)

1 Like

Thanks Brucanna so,
In Manager,

  1. go to Expense Claims tab, select Billable expenses and input 55 with GST selected (and fill in other relevant fields).
  2. Go to Customers tab and create invoice for 50.
  3. So now have 50 due from customer and 5 from ATO (as per GST Calc. sheet)


Step 1 and 2 as above, but edit invoice to show 50 plus 5 GST.
3. So now have 55 owed from customer,
4. Receive payment of 55 from customer
GST calc sheet shows 5 from sales and 5 on purchases cancel each other out
(Cash Basis)
So does it matter which method is used?

Both the Billable Expense & the Sales Invoice MUST show 50 + 5 GST - so 2nd choice.
Your first (2) would be illegal - Invoicing the customer without charging the GST

Ok, am I right in thinking that Manager treats billable expenses (reimbursable expenses) on the balance sheet so that when the expense claim is cleared the balance is zero.

But when it comes to GST Manager puts the expenses in the calculation sheet as sales, P&L, (which it must do so the GST on purchases can be claimed).

So at the end of the year when Manager prepares the financial reports won’t the total sales or income be different to the BAS total for the year? And won’t the reimbursable expenses be treated like normal business expenses.

I realise this topic is bordering on other areas, but I felt because it is the way Manager treats these accounts it was worth asking the question here.

Billable Expenses and Expense Claims are entirely different things, @brianeb. A billable expense is something you purchase on behalf of your customer. It will show as an asset until it is invoiced. It never hits your income or expense accounts. It is a transparent pass-through.

An expense claim is recorded when someone pays for something on behalf of your company from personal funds. It shows as a liability until cleared by reimbursement or transfer to equity, because in effect the company owes the payer that money.

So be careful when using the terminology reimbursable expenses. It is not clear whether you are referring to a billable expense or an expense claim. They are handled differently and would have very different impact on GST.

It will be different but that’s normal. When company sells fixed asset, the sale will decrease assets. Selling asset is still a sale from GST point of view but it’s not an income from P&L point of view.

The same argument can be made for billable expenses too.

My point is, if you expect total sales as per GST to reconcile with total income as per P&L, then don’t.

Make sure to use Tax Audit report to make sure tax codes are set properly on all transactions… then you will be fine.