Reimbursement of costs by the customer


#1

Email received as support@ezycount.ch:

I use my credit card to pay bulk invoices from Facebook, then I invoice the clients to cost.
Example: I pay 100.- every month to Facebook. Every 3 month I invoice the cllient for this amount, but it isn’t really money I earned as it is money I paid out on their behalf.

When the client sends this 300.- into my account -it is not really money in but money reimbursed and I don’t want this money to show up as “profit” as it is not.

How do I enter this as “Reimbursement for Marketing cost”


#2

First let’s look at the simplest solution, for the more detailed, check below.

Simplest solution:
If you put the total amount receive from the customer to the account 3000 sales and then you put the total amount you pay to Facebook to 6600 Advertisement. It will do the trick as the money the customer pays will compensate the costs in advertisement you booked.

More detailed:
Add an account in the 4XXX group such as 4250 and name it “Marketing costs reimbursed by customers” Here you put all the costs you have paid for your customers.
Add an account in the 3XXX group such as 3250 and name it “Reimbursement of marketing costs” Here you put all the reimbursement you receive.
When you look at the income statement over a one year periode, the two accounts should be similar. If it is not the case, you paid costs that your customers did not reimburse you.


#3

Thank you! This will work just fine. I have opted for the second way of doing it as it also makes my accounting easier to follow and double check if my expenses have been covered. Have a great day!