Less Expense Question

Hello… I have a question on Less Expense Account

It is like this…
I have an invoice which has Shipping Fee and in account Less Expense called “Paid Shipments / Courier”
and when looking in Summary - Less Expense the value of Paid Shipments / Courier is − 6,600.00

What does − 6,600.00 means? (negative sign)

It is difficult to tell for sure, because you provided so little information. But normally, if your chart of accounts is set up to show Income accounts Less Expenses, the expense account balances will be positive numbers. This is a standard accounting convention. Everyone should know that the numbers are subtracted from income because of the the word “Less.”

So when an expense account balance is negative, that means it was entered as though it was income, but posted to an expense account. There are several ways this could happen. You might have used Receive Money instead of Spend Money to record the expense. Or, you might have entered the transaction as a negative number.

Click on the blue -6,600.00 balance to see what makes it up. Edit or correct that transaction.

thanks for your reply…

the account is for shipping fees collected from the clients.
when I do invoice a client and add the shipping cost that is in the account of "paid shipments / courier under less expenses.

I collect shipping fees to clients and then pay the fees to the courier or shipping company.

is it correct to input collected shipping fees to Less Expense Account?

This is not the correct procedure. Sales invoices are debited to Accounts receivable and credited to accounts selected for the line item. A credit to an expense account means you have received money. You need to allocate the shipping charges you invoice to the customer to an income account, which you might name Invoiced Shipping Costs. When the shipping company invoices you and you pay them, you allocate that transaction to an expense account, which could be named Paid Shipping Costs. The two will offset, if equal, producing no net income.

Another way to handle this, since you are paying expenses on behalf of the customer, is to use Billable Expenses. Such expenses do not affect your profit and loss statement, but are passed through to the customer.

oh… ok this is why I am seeing net loss or sometimes net gain. I’ll try your suggestion and I will get back for update.

You mean “Billable Expense” under income account? or the Billable Expense Tab?

Where do I create Billable Expenses? there is no button like “Create”

You dont “create” a billable expense. When spending money or entering a purchase invoice, you post the transaction to Billable expenses + Customer. See this Guide:

Alright got it @Tut. Thanks for the details. We will try to use this method for the meantime. :wink: