Recharging expenses

Hey there

Quick bookkeeping question.

Our company has incurred expenses for a client. Expenses have all been posted to same nominal code (it's called Project Costs For Recharge).

We are recharging these to the client - should I post the invoice to a Income code or is it ok to post the invoice to the Expense code?

Either way it nets off to no net income or expense. The only difference is posting to an Income code increases the turnover with a corresponding expense; the other removes the expense completely.

My gut feeling is that it should be an income code but I don't think it's correct to increase turnover when this isn't actually a sale?

CW

Comments

  • imeldabye
    imeldabye Registered Posts: 147 ? ? ?
    In my experience you should charge it out as income, as you are in reality charging it out in a sales invoice.
    provato9
  • MarieNoelle
    MarieNoelle Moderator, MAAT, AAT Licensed Accountant Posts: 1,369
    I would post it as income (as imeldabye suggested) and enter the expenses incurred as "cost of sales".
    provato9
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    I would post it as income (as imeldabye suggested) and enter the expenses incurred as "cost of sales".

    Yes, this.
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