Reimbursement invoice (bookkeeping)
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How about if you (as a company) merely pay an invoice on behalf of a customer (another company)? - This appearantly, is the wonderful world of reimbursement invoices, aka. expense claim invoices or kostendoorberekening.
Case - Nov. 2024
How this article started - This case will be used in the remainder of this article:
A customer of mine (also a Dutch company), asked if I could pay on his behalf with credit card a transaction of € 1,900 (because his credit card couldn't handle such a large amount). This was a bill from an Italian company and without VAT (intracommunitair). How to incorporate this in the bookkeeping?
- One approach would be, to simply invoice this and add VAT. In the end, my customer will get the VAT back from the tax office. However, it seems unnatural to regard this as regular revenue.
- Or invoice without VAT? That seems unlikely, as my business typically only sells services against the high Dutch VAT rate.
- Or maybe there is an entirely different approach?
How it works
- Any achievement? The essence is, that the company who does the payment, does so without rendering any service (verrichten van een prestatie)
- No VAT: This also determines if VAT is involved: VAT stands for value added tax, and when no value is added, no VAT applies, and this transaction is not incorporated in regular VAT submissions
- Invoice number: However, this document (reimbursement invoice? kostendoorberekening-factuur?) must have a regular invoice number.
Bookkeeping transactions
- Note that the transactions below, don't indeed involve a revenue account - So changes are, that concerning VAT, this is completely transparant
- As the reimbursed amount is also the same as the payed amount, there are no costs involved either
- Quite strange: A transaction that doesn't involve P&L and only the balance sheet locally: A nett transfer of funds from credit card to checking account - Quite perfect.
Record the payment
- Entry description, e,g,: Payment invoice xxx on behalf of customer yyy - reimbursement invoice 2024-123
- Transaction type code: E (Expense claim - Codes C and R were already used)
- Debit: Accounts receivable: € 1.900
- Credit: Credit card payable: € 1.900.
Receive payment
- Same entry description
- Transaction type code: P (Payment)
- Debit: Checking account: € 1.900
- Credit: Accounts receivable: € 1.900-.