We have charged from client for their event management and made the payment to the vendors on client's behalf.
so, should It be shown in my company's expenses?
You could probably do this in several ways. Here's how I would do it
1) when receiving payments on behalf of clients, credit it to an income account, probably using one in the 8-xxxx section to distinguish it from your operational income. It's actually a liability to you at this point, but I'd use an Income account for reporting purpose as below. Have a Job for each client and note that job on the payment
2) when making a disbursement to the client, expense it against a 9-xxxx account, also using the same Job, and at that point adjusting for your fee. It would look like this
9-xxxx Disbursements to Clients 1,000
1-xxxx Bank Account 900 Job A
4-xxxx Fee income for handling client payments 100 Job A
You can then use job reporting to ensure that monies are correctly accounted for. All jobs should end with a zero balance
At balance date you will want to adjust for monies held by adjusting any balance held out of the income account to a liability account
NOTE - the monies received on behalf of your clients is technically a liabity, I have used Other Income and Other Expenses sections in this example so that Job reporting will work as a check on this. If Asset/Liability accounts are used , job reporting won't show the results.
CAclubindia
