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The QuickBooks Specialists

How Can I Record Vehicle Mileage As a Reimbursable Expense?

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To record vehicle mileage as a reimbursable expense, you first need to set up the vehicle in the Vehicle List and the Service or Other Charge Item that represents the rate at which customers will be invoiced for mileage. 

Once these preliminary steps have been completed, click on the Company->;Enter Vehicle Mileage… menu selection to record the mileage for a trip.

To make this trip a reimbursable expense, be sure to check the Billable checkbox, specify the appropriate Customer:Job, and choose the Item you previously created that is the source for your invoice description and the rate at which you will invoice your customer.  Enter your Notes for the trip – you’ll have the option of incorporating this information into the customer invoice later.

QuickBooks Premier 2009 Enter Vehicle Mileage Billable

Click the Save & Close or Save & New button to save your work.

Next, click on the Customers->Invoice for Time & Expenses menu selection to start a new customer invoice and add mileage expenses to it.  Select the Mileage tab.  Unlike reimbursable expenses that appear on the Expenses or Items tabs, you have more control over how information is transferred to a customer invoice for expenses that appear on the Time or Mileage tabs.

QuickBooks Premier 2009 Choose Billable Mileage

Click the Options… button to specify how information will be transferred to a customer invoice.  You can opt to use the Notes you entered when you recorded the mileage (Transfer activity notes), use the description you specified when you created the Item (Transfer item descriptions), or both (Transfer both notes and descriptions).  You can also choose to have each trip appear as a separate line item or to combine trips that use the same service item and rate.  If you opt for the latter, only the item description will appear on the customer invoice.

QuickBooks Premier 2009 Options for Transferring Billable Mileage

Click Ok to close the Options for Transferring Billable Mileage window.

Select the mileage expense items that you’d like to include on a customer invoice and click Ok.  The expense items you selected will appear using the options you specified.  Complete the invoice and save your work.

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How Do I Manage the Vehcile List?

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QuickBooks maintains a Vehicle List and can track the mileage for those vehicles, as well as help to charge customers or clients for mileage recorded.

The Vehicle List tracks 3 simple pieces of information about a vehicle: the name, the description, and the active status.

To manage the Vehicle List, click on the Lists->Customer & Vendor Profile Lists->Vehicle List menu selection.

QuickBooks Premier 2009 Vehicle List

Click on the Vehicle button to add, edit, delete, or change the active status of list entries.

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How Do I Prepare To Charge Customers For Mileage?

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The first step to charge customers or clients for vehicle mileage is to create a new Item with a type of Service or Other Charge.  The Sales Price that you enter for this Item will be the price charged to the customer for mileage.

QuickBooks maintains a separate list of Mileage Rates, but these rates are not automatically used to invoice customers.  Instead, they’re just a reference for the historical rates allowed by taxing authorities.

Click on Lists->Item List to add a new Item.  Be sure to specify the Type as Service or Other Charge, and to select the This item is used in assemblies or is a reimbursable charge checkbox just below the Item Name/Number field.

Specify both an Expense Account and an Income Account for the Item you create.  Enter the description you’d like to appear on customer invoices and the rate you’d like to charge customers for mileage in the Sales Information block.

QuickBooks Premier 2009 New Item Mileage

Click Ok to save the Item.

You’ll use this item code on customer invoices and to identify those mileage expenses that will be billed to a customer as a reimbursable expense.

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What Is the Closing Date and How Do I Set It?

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The Closing Date in QuickBooks is a setting that indicates the date through which your books have been closed.  Normally, books are considered closed after they’ve been reviewed, all adjusting entries have been made, and reporting has been completed to investors, lenders, or tax authorities.

It’s used to protect data from inadvertent modification by making it more difficult – but not impossible – for you to change or delete transactions on or before the closing date.  Unlike other accounting systems that require you to close your books and make it impossible to add, change, or delete transactions in closed periods, QuickBooks offers the flexibility for you to restrict access to periods you or your accountant have determined are closed and to later remove that access restriction, a process commonly called “re-opening your books.”

It’s important to understand that setting a Closing Date doesn’t result in recording any transactions; QuickBooks automatically makes certain adjustments, such as increasing your Retained Earnings account by the amount of your prior year’s net income on the first day of your fiscal year.  The Closing Date is only an access restriction.  You can control how strict that restriction is by whether you set a Closing Date Password.

To set the Closing Date, click on the Accounting sub-menu of Edit->Preferences… menu selection and choose the Company Preferences tab.  You’ll see the current Closing Date, if any.

QuickBooks Premier 2009 Preferences Closing Date

Click on the Set Date/Password button to view the Set Closing Date and Password window.

QuickBooks Premier 2009 Preferences Set Closing Date

Like many functions in QuickBooks, there are multiple ways to get to this same point.  The Company->Set Closing Date… menu choice will take you to the window to make this setting.  You can also click on the Company->Set Up Users and Passwords->Set Up Users… menu selection, followed by clicking on the Closing Date… button.

QuickBooks Premier 2009 User List Closing Date

With either method, you’ll end up at the the Set Closing Date and Password window.

You can set or change your Closing Date and the Closing Date Password on this window.  If you attempt to enter any transaction with a date on or before the Closing Date, QuickBooks will display either a warning or a confirmation window, depending on whether you set a Closing Date Password.  If you set a Closing Date Password, you’ll have to first correctly enter it to record the transaction.

Here’s the warning you’ll see when attempting to record a transaction dated on or before the Closing Date if you do not enter a Closing Date Password:

QuickBooks Premier 2009 Closing Date Warning

You’ll still be able to record the transaction by clicking Yes.  The access restriction is simply forcing an extra step.

Here’s the more strict limitation you’ll see when attempting to record a transaction dated on or before the Closing Date if you do enter a password:

QuickBooks Premier 2009 Closing Date Password

You’ll have to correctly enter the password to record the transaction, so the access restriction is greater.

Since only the QuickBooks Administrator or a user with External Accountant privileges can set QuickBooks preferences, it’s not possible for users without those higher privileges to first remove the Closing Date or change the Closing Date Password to bypass the access restriction.  That insures that, when combined with user restrictions, the Closing Date restrictions are effective.

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How Do I Clear the Closing Date or Re-Open My Books?

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The Closing Date in QuickBooks is a setting that indicates the date through which your books have been closed.  Normally, books are considered closed after they’ve been reviewed, all adjusting entries have been made, and reporting has been completed to investors, lenders, or tax authorities.

Since the Closing Date is only an access restriction, sometimes you may find a need to clear or remove the Closing Date to permit you to record prior period transactions.  Typically, this isn’t done to record a small number of transactions, because those transactions can be recorded by over-riding a warning or correctly entering the Closing Date Password.  It’s done when it’s later discovered that a sufficiently large number of prior period transactions need to be recorded, and the access restriction slows this process unnecessarily.  Removing the access restriction after you’ve previously set it is a process commonly called “re-opening your books.”  For example, you may need to re-open your books to prepare an amended tax return.

To clear or remove the Closing Date, click on the Accounting sub-menu of Edit->Preferences… menu selection and choose the Company Preferences tab.  You’ll see the current Closing Date.

QuickBooks Premier 2009 Preferences Closing Date

Click on the Set Date/Password button to view the Set Closing Date and Password window.

QuickBooks Premier 2009 Preferences Set Closing Date

Simply delete the date in the Closing Date field and click Ok.

Since only the QuickBooks Administrator or a user with External Accountant privileges can set QuickBooks preferences, it’s not possible for users without those higher privileges to remove the Closing Date.

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