Reimbursed Expenses


I am trying to figure out whether or not I should include recoverable expenses in line 101 of the HST report.

I work for a patent agency. We pay official fees on behalf of our customers and then we add this fee as reimbursements to the invoice we issue to our customer.

Should I add this recoverable expense to line 101 ?

Thank you

image of fancy scroll lines


I have never dealt with patents specifically, but when I have reimbursable expenses, this is how I deal with it in QuickBooks ... as pictures are worth a thousand words, I am including screen shots of QuickBooks windows.

This first screen shot shows the entry of the vendor billing pertaining to reimbursable expenses. Notice that I have indicated that the expense is to be reimbursed.

screenshot of QuickBooks vendor invoice with reimbursable expenses

The second screen shot shows the client invoice charging the reimbursable expense. I have assumed that you are not marking up the reimbursable expense ... which is treated a bit differently.

screenshot of QuickBooks client invoice with reimbursable expenses

In this third screen shot, you get to see the effect on the income statement. You can see the expense account reflects a nil effect.

screenshot of QuickBooks profit and loss reporting of reimbursable expenses

And finally, this fourth screen shot shows how it is reported on the GST HST report. You can see that the customer amount invoiced shows on line 101 excluding the GST HST collected. The GST HST collected shows on line 103 and the GST HST associated with the original expense (the input tax credit) shows on line 106.

screenshot of QuickBooks GST HST reporting of reimbursable expenses

I handle reimbursed expenses this way because of my understanding of how reimbursed expenses are to be reported for tax purposes.

QuickBooks® is a registered trademark of Intuit, Inc. ... Member of the QuickBooks ProAdvisor® Program ... Screen shots © Intuit Inc. All rights reserved.

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Oct 08, 2010
Thank you
by: Anonymous

Thank you for the elaborated answer, however I still don't understand. I'll try to rephrase my question.

So far I am doing exactly as you described, except that my expenses does not include taxes. What I am trying to know is if in line 101 I am suppose to enter the total of $ 150 or $ 250.

Please note that my expense does not include HST (when I enter the bill and then call into the invoice, there is no HST involved), therefore I do not charge HST when issuing an invoice to my customer.

Thank you

Oct 09, 2010
Reimbursed Expenses
by: Bookkeeping Essentials


When you enter your patent fee into QuickBoooks, you would have a code for the sales tax. If the sales tax code is not GST or HST, then your sales tax code would be either Z for zero rated or E for exempt.

CRA's publication RC4022 General Information for GST/HST Registrants says,

"Enter the total amount of revenue from supplies of goods and services, including zero-rated supplies and other revenue for the reporting period. Do not include provincial sales tax, GST, HST, or any amounts you reported on a previous return. Round off the amount to the nearest dollar. If you are eligible to file a paper return, enter this amount on the return portion (Part 2) that you will send to us."

I am fairly certain the rest of the example would be the same. The above reference suggests the reimbursement invoice to the client would show up as a sale on line 101 of the GST HST report.

I would have to play around in QuickBooks to verify this. With the example I gave you, the QuickBooks software included the sale automatically on line 101 because I created a sales invoice.

You may want to call CRA to speak with them to assure yourself this is the case.

Jun 09, 2012
Thank you
by: Dianne

I have just started setting up a new business and working on dibursements/reimbursable expenses for the first time. Your explanation and graphics finally made sense after reviewing quickbooks and several other web sites. Thank you for your help!!

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