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Fuel purchased by business on behalf of client in QBO?

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What account would be used if a business purchased fuel for a customer's vehicle (NOT for the company's own vehicles)?

QuickBooks Online

Hello Community Users! We just wanted to add a comment to this thread. For clarification you would use COGS in the case where this is a direct cost for you for producing the goods sold/ service and it can include the cost of materials used to create a product or perform a service We have included a blog post for more clarification here

So in this case if the fuel you need to add to test the car can be classed as materials to perform a service(the repair) Then you could use that account. The chart of account used to show the expense is something we'd advise to check with an accountant if you are unsure. We welcome any comments from other users on this thread.

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SPOT3

If I interpreted your question correctly, the business paid for something (fuel in this case) on behalf of a client, who then repaid the business for the full exact amount sometime later? Perhaps the business even passed on the bills or receipts to the client, which could be made out in the client's name?

If that's the case, it's an IOU, advance or loan posting to a debtor account in the customer's name, awaiting future deposits to clear off when the client repays the IOU. There should be no raising of invoices, no claiming of VAT and nothing that would affect the P&L.

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VerMedAuthor

No. Without assuming a reimbursement from the customer---what account would you record this expense?

I have been using a separate expense account and labeled it "job supplies" since this expense is never known ahead of time and is spent for a specific job. These expenses tend to occur when customers drop off their vehicle for repairs that take some time to complete and upon drop off, the vehicle has very little fuel in it. Therefore, when the business has to test drive said vehicle it is left with absolutely no gas, so then the business replaces the small amount of gas (may replace with a bit more than when dropped off, anywhere from about $9-$20).

Does the account I'm using suffice? Or should it be part of COGS?

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emmam6Answer

Hello Community Users! We just wanted to add a comment to this thread. For clarification you would use COGS in the case where this is a direct cost for you for producing the goods sold/ service and it can include the cost of materials used to create a product or perform a service We have included a blog post for more clarification here

So in this case if the fuel you need to add to test the car can be classed as materials to perform a service(the repair) Then you could use that account. The chart of account used to show the expense is something we'd advise to check with an accountant if you are unsure. We welcome any comments from other users on this thread.

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