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Expenses on invoice compared to "spending money"


#1

Quick question. I don’t entirely how to include certain expenses. There are two situations I have:

  1. I create an invoice and the customer pays my expenses
  2. I have to pay my expenses out of pocket

When I add expenses to an invoice and receive money for it it shows as a negative amount. When I add expenses as money spent on a bank account it shows as a positive amount. What is the correct way to add an expense that isn’t covered by a customer?

I’m a sole trader if that makes a difference.


#2

Here is the thing, in both situations you incur an expense.

The difference is that in some cases, you will invoice customer for those expenses which means it is actually an income (that’s why you see the expense as negative). But once you record actual expense, then this income will offset the expense and therefore you should end up with no expense as you made your customer to paid them.

If you don’t charge your customer for incurred expense, then there is no income and expense will remain as expense.