Recording Mileage & Invoicing of such in QuickBooks

Posted by on Mar 22, 2011 in Customers Module | 0 comments

I remember a company that had a fleet of trucks (7-8) that it used for business. The employees would pick these up from the office location and drop them off at the end of the work day. Now some of these people also took them home. This is where the problem lies with CRA (Canada Revenue Agency).

Under ITA 6, the benefits associated with any non-business use of that vehicle must be included in the individuals’ employment income. The two types of taxable benefits associated with such personal use are referred to as a standby charge [ITA 6(1)(e)] and an operating cost benefit [ITA 6(1)(k)].

The reason that I bring this up, has to do with recording mileage on those types of vehicles, and of course if that mileage is going to be billed back to the customer. Dealing with the first part of the previous statement – if the vehicle and keys are returned to the office at the end of each days work, and the vehicle IS NOT taken to the employees residence, then it could be assumed that it is for work only and not an employee benefit.

If the employee used the vehicle for work and pleasure, then a reduced standby charge might be applicable in this case.

Either way, I would be recording the mileage, so that if you were ever audited, you could prove the actual business use in relation to non-business. Since this is not a tax course, I would suggest you contact your QuickBooks Trainer/Accountant for further clarification.

Moving on, this is how you would record mileage in QuickBooks.

From the Menu bar, choose Company/Enter Vehicle Mileage. This will open up the Enter Vehicle Mileage screen where I will enter in the appropriate information into the Vehicle field.

If you have not set this up yet, just click on <Add New> and provide the correct information. Besides the year, make and model, you should include the VIN (Vehicle Identification Number) of the vehicle.

Next comes the Trip Start Date, Trip End Date, Odometer Start, Odometer End and Total Kilometres. If this mileage is to be charged to a Customer, then fill in the Customer: Job and Item fields. The Notes box can be used for any additional information.  When finished click Save & Close.

Now to Invoice the Customer for this mileage.  Go to your Home page and click on Create Invoices, find the Customer to bill, and then click on the Add Time/Costs tab underneath the body of the invoice.

What you will then see is the Choose Billable Time and Cost screen, click on the Mileage tab, the line with the mileage to invoice and then Options.

For the Customer’s readability and so that the invoice does not get cluttered up with too much information, tag the button that says Combine activities with the same service items, and then OK and OK to transfer the mileage to the invoice.

This is what the invoice would then look like. You have just learned how to record and invoice mileage in QuickBooks.

To view a report of the mileage go to the Menu bar/Reports/Jobs, Time & Mileage and Mileage by Job Summary or Detail

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