Could someone please explain the difference between “Billable expenses - cost” vs “Billable expenses - invoiced” and how to use each?
Thanks
Thank you for the reply, Tony. My next question then is: Why are both items under the ‘Expenses’ category? Shouldn’t the “Billable expenses - invoiced” then fall under the ‘Income’ category? This is why I am confused. Thank you.
When you make a payment for billable expenses they should be allocated to the Billable Expenses account and assigned to a customer. This allocates the expense to an asset account.
When you invoice the customer from the Customers tab and select the billable expenses it moves that cost from the asset account to the expense and income account. The overall net effect is nil because you recover the cost from the customer. If you markup the billable expenses when it is invoiced it will be reflected in the profit & loss statement.
Beautiful. Thank you for the explanation. This was very helpful. One last question:
Regarding this last response:
“If you markup the billable expenses when it is invoiced it will be reflected in the profit & loss statement.” …but where? Under “Billable expenses - invoiced” in the ‘Less expenses’ section?
The markup on the billable expenses—should this be considered income and labeled as a separate line item or still labeled as “Billable expenses - invoiced” to fall under the ‘Less Expenses’ category to be shown as a negative expense? I’m just trying to understand if the markup percentage falls under Income or Expenses.
Thank you so much. [moderator removed part as soliiciting is against the forum guidelines] I have a lot to learn and I trust this community.
Thanks again!
I moderated your post, meanwhile in reply to your post:
The markup is income, not an expense.
If a billable expense is invoiced for more than its cost, the full amount invoiced is recorded under “Billable expenses - invoiced” as income, while the original cost is recorded under “Billable expenses - cost” as an expense.
The difference between those two amounts is the margin earned on the billable expense and contributes to profit.
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