Recharging expenses
Chinless Wonder
Registered Posts: 61 Regular contributor ⭐
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
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
0
Comments
-
In my experience you should charge it out as income, as you are in reality charging it out in a sales invoice.1
-
I would post it as income (as imeldabye suggested) and enter the expenses incurred as "cost of sales".1
-
MarieNoelle wrote: »I would post it as income (as imeldabye suggested) and enter the expenses incurred as "cost of sales".
Yes, this.0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 318 NEW! Qualifications 2022
- 161 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 87 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership