Reimburse employees’ mileage and vehicle expenses in QuickBooks Online

Learn how to enter and give mileage reimbursements to your employees.
You can use the QuickBooks Online mobile app to track your business mileage. .
Employees should use company vehicles for business trips. If an employee used their personal car for business, you can reimburse them for the mileage. Here’s how to track mileage reimbursements and pay employees for the expenses.

Note: Follow these steps if your employee paid for a company’s vehicle expense out of pocket, like an oil change.

Step 1: Set up manual tracking for mileage reimbursements #

If you haven’t already, set up a vendor profile for your employee and a special expense account to track the reimbursements.

Set up a vendor profile for your employee #

This vendor profile is separate from the regular employee profile used for payroll. Only use it to track reimbursements. Keep using employee profiles for everything else.

  1. Go to the Expenses menu and select the Vendors tab.
  2. Select New vendor.
  3. Enter your employee’s info.
  4. Give your employee’s vendor account a unique display name. Tip: Add “(Mileage)” to the end so you know which vendor profile to pick to track mileage.
  5. Select Save.

Set up a mileage reimbursement expense account #

  1. Select Settings ⚙ and then Chart of Accounts.
  2. Select New.
  3. From the Account Type drop-down menu, select Expenses.
  4. From the Detail Type drop-down menu, select Auto or Travel
  5. Give the account a unique name that’s easy to identify.
  6. Select Save and Close.

Create an item for mileage reimbursement #

Create a mileage item you can add to a bill. Use it each time to track this type of reimbursement.

  1. Select Settings ⚙ and then select Products and Services.
  2. Select New, then select Non-inventory for the type.
  3. Name the item “Manual mileage.”
  4. In the Description section, check I sell this product/service to my customers. Then enter a description.
  5. In the Sales price/rate field, enter the cost you pay for travel per mile.
  6. In the Purchasing information section, check I purchase this product/service from a vendor. Then enter a description.
  7. From the Expense account ▼ dropdown menu, select the mileage expense account you just created.
  8. Select Save and close.

Step 2: Create a bill for the mileage reimbursement #

Create a bill anytime you need to reimburse an employee. Use the vendor profile, expense account, and mileage item you just created.

  1. Select + New.
  2. Select Bill.
  3. From the Vendor ▼ dropdown menu, select the employee’s vendor profile you created for mileage.
  4. Select Item Details to expand the section.
  5. From the Product/Service drop-down menu, select the mileage item you created.
  6. Enter the quantity, rate, and amount as needed.
  7. Select the Billable checkbox if you need to make this a billable expense for a customer. Then select the customer from the drop-down menu.
  8. Select Save and close.

Step 3: Reimburse your employee #

After you pay back your employee, you can record the payment in QuickBooks:

  1. Select + New.
  2. Select Pay bills.
  3. Select the Payment account and the employee to reimburse.
  4. Select Save.

These reimbursements show up on your Profit and Loss report. At the end of the year, you can determine your deduction.

Next steps: See all of your mileage reimbursements #

QuickBooks tracks these bills in your mileage expense account. You can go to the Reports menu and run a Profit and Loss report. All of the expenses are listed in your mileage expenses account.

You can also go to your Chart of accounts and review your expense account register to see specific expenses you’ve reimbursed.

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