Tracking habits allows people to see how they can improve in different areas, including their spending. The same concept applies to your business. Tracking expenses is one of the keys to good budget management and profit growth.
When you don’t track expenses correctly, you can underestimate or overestimate your revenue — not to mention, you’ll miss out on deductibles during tax season and disrupt your cash flow. Expense tracking affects your employees as well, particularly when you reimburse them for their out-of-pocket business expenses, such as business meals, industry education, supplies for in-office or remote work, and travel costs.
Managing these employee reimbursements properly is also a way to save money. In fact, a 2018 report from Mastercard found that the so-called hidden costs of travel expense management — compliance, processing workflows, and audits — account for 11 to 23 percent of the total cost of expense programs.
You can lower costs and effectively track expenses and reimbursements through an inclusive accounting program like QuickBooks, one of the most popular tools for businesses. It’s a great program to track expenses and reimbursements and consistently balance expense budgets before they become too complicated to control.
First things first: Let’s discuss how to record a reimbursement in QuickBooks.
Making reimbursements part of expense approvals
You may record expenses and send reimbursements to employees the same day or delay repayments until set paydays. Whichever you choose, to ensure you reimburse workers within a reasonable time frame, set up programs and systems — such as expense policies and a reimbursement approval process. Understanding how to record a reimbursement in QuickBooks is a critical step.
You can also speed up reimbursements and tracking by using apps that gather evidence of how expenses are business related. These apps are especially helpful to substantiate expenses during audits. For example, an app that digitizes receipts can confirm a business lunch was within budget or that an employee incurred transportation costs to attend a local conference.
Recording a reimbursement in QuickBooks
Here’s a step-by-step guide:
- Navigate to the QuickBooks dashboard.
- Click the plus button (called “new”) on the upper right-hand toolbar to open a dropdown menu.
- Select Journal Entry. You’ll see a spreadsheet that you can fill in with a variety of line items — one row per transaction.
- Click the Account column to open a dropdown menu of accounts that are connected to QuickBooks and that you conduct the majority of your business through. Choose the bank account you use to pay employee expenses.
- Enter the reimbursement amount under the Credits column.
- Write a brief but clear description of the expense in the Description column. Though you don’t need to fill in this field, adding a description will help you stay organized.
- Select your employee from the dropdown menu in the Name column. This menu should include the employees you regularly reimburse.
- Click the Save button on the lower right-hand corner.
- Close the journal.
Another element of recording a reimbursement in QuickBooks is ensuring the reimbursement comes out of the correct bank account:
- Navigate to the dashboard.
- Click the plus button.
- Click Expense in the dropdown menu.
- Under the Account column, choose the bank account that will fund the reimbursement.
- Fill in the Description column with the same information you put in the journal entry.
- Input the reimbursement amount in the Amount column.
- Include other information you need, such as the name of the employee, dates, etc.
- Save the Expense entry.
Making reimbursements simple with JotForm
When your employees turn in reimbursement requests, knowing how to record a reimbursement in QuickBooks allows you to make sure claims show up promptly on your business banking accounts. But how do you collect those reimbursement claims just as quickly? JotForm has the solution.
First, you can get rid of unwieldy paper forms by switching to JotForm’s online reimbursement forms. After you customize your form with the proper widgets, employees can turn them in from any device — including from their phones when they use the JotForm Mobile Forms app — setting off the expense approval process. You can automate that process with JotForm Approvals, which allows you to drag and drop forms, approvers, and conditions to streamline approvals.
What’s more, JotForm easily integrates with QuickBooks through Zapier or Cloudpipes, connecting your forms and your bank accounts so you can account for each cent. JotForm Tables makes this connection even stronger by offering a database of form submissions, giving you yet another way to analyze expenses.
With dynamic forms and workflows from JotForm as well as accounting programs like QuickBooks, you can stick to your budget, reimburse employees quickly, and equip yourself to handle the highs and lows of expense management.