Krystal Savage said:

In the payroll module, I added the invoice of the supplies to the 5740 Miscellaneous account (103.66 incl GST).

The next week for payroll, I entered the 103.66 in reimbursement for the employee.

I assume because you have indicated you entered the amount twice in the payroll module, that the first line here should be

"In the payables module..."

If so, because you have already recorded it in payroll and have given the employee the money, I would remove it from payables, it is a duplicate.  Do one or the other, not both modules.

But you have not yet recorded the applicable sales tax paid, so you need to post a general journal entry to record the tax paid by debiting the sales tax paid liability account (GST Paid) and crediting 5740.  In fact, since you called the purchase, supplies, not miscellany, I would move the expense to the proper expense account as well and not leave it in Miscellaneous.

This last step is the main reason why I always use payables to reimburse employees for purchases on behalf of the company.  It's all done in one entry if you cut the cheque right away.

create an "employee reimbursement" expense account

link this expense account to the 'reimbursement' income item

use 'pay expenses' by cash

  select the vendor, ie ABC HOTEL

  line 1 is positive to the actual expense account (TRAVEL)

  line 2 is negative to the employee reimbursement account, no tax

you want a 0.00 expense voucher, leaving a credit balance for the reimbursement account

using payroll, enter the amount to be reimbursed as part of the cheque

which, we posted, will give you a 0.00 balance for the reimbursement account

if the account is ever non-zero, you know something hasn't be reimbursed (or over paid)

Roger,

I still think running the original invoice through payables in the employee's name is better...one entry.  If you wish to pay it on payday instead of the date of entry, then it is on the Vendor Aged report, so it is easily seen as not paid.

Why do you need to use 'pay expenses'?  Why does a purchase invoice not work for your procedure?

Why have you specifically said not to record the sales tax?

Running reimbursements through Payables and Payroll works well for us.  We've been doing this for years, and Sage now has a Support Hub article explaining the procedure here:

sagecity.na.sage.com/.../how-to-reimburse-an-employee-purchase-through-payroll.aspx

It seems like a lot of extra work to enter it in two places, but we've found that replacing and chasing down uncashed cheques made out to employees, and chasing down receipts for warranty, capital records, and a GST review was a fair amount of pain, too (as in who bought that chair / phone / laptop??)  

Richard

I agree with recording as a payable using the invoice/receipt date

and yes, a purchase invoice, with a net 0$ balance works too

but if I pay it in the employee's name, I can't analyze how much business was done with ABC HOTEL

as to excluding sales tax, that comment is only for line 2, employee reimbursement

 db hotel expense   100

 db gst paid                 5

 cr employee reimb 105

and there is no time relationship between recording the expense, and using payroll to reimburse the employee

the expense could be recorded today, and paid in 14 days

Roger,

Ok, I see your point from an analysis perspective.  I guess I have never had to analyse those types of transactions.  Most of the employees of clients I work with buy things at Staples and Canadian Tire for the company and the companies usually don't analyse those types of transactions.  If they buy the bigger things, they have a company credit card and I post payments through the credit cards in the program.  Randy's point is good as well, trying to trace who purchased something is not always easy when posted under the employee name when you want to get warranty service.

Roger,

Ok, I see your point from an analysis perspective.  I guess I have never had to analyse those types of transactions.  Most of the employees of clients I work with buy things at Staples and Canadian Tire for the company and the companies usually don't analyse those types of transactions.  If they buy the bigger things, they have a company credit card and I post payments through the credit cards in the program.  Randy's point is good as well, trying to trace who purchased something is not always easy when posted under the employee name when you want to get warranty service.