Help & How-To

Finance & Accounting
Can this out-of-inventory order be called a business expense?
Usually we buy plenty of doors at the beginning of the year and then charge the customer for parts and labor a the time the sale is made. We recently had a customer that didn't want a door from our inventory, so the customer prepaid for a door that had to be ordered. Is the door still a business expense to us even if we had to pay for it from our business bank account although we got a check from the customer?

Asked by mikesmobile
Posted: Tuesday, April 22, 2008  |  Found in Finance & Accounting


More answers by Pam Newman
Answer by Pam Newman
It would be a reimbursable business expense. You paid for the door, so it's a cost-of-goods-sold expense. The amount you charge the customer is income to you. If it's dollar for dollar, then you can run it as income or just reimbursed business expense.
Pam Newman is a Certified Management Accountant, author and Certified QuickBooks ProAdvisor for Financial and Point-of-Sale software. She is also president of RPPC, Inc., which provides customized business development services.


Recent Articles & Resources
We've gathered content from some of the best resources on the web. Find tips to help you run a successful business with this collection of videos, articles, expert blogs, and more.
Finding the right business match
Effective networking involves the pursuit of viable, productive contacts. Sydney Pollack talks about the crucial first step in getting a project off

Help & How-To series: Financing business plans
American Express OPEN SM brings you the best in business advice from today’s most sought-after experts in this promotion of Entrepreneur’s popular

OPEN BOOK: A Practical Guide to Online Marketing
Download a PDF of our complete online marketing guide including expert advice, tips on search engine marketing, Web 2.0 and web analytics, as well as

Respect the marketplace and reap the rewards
Wikipedia founder Jimmy Wales explains how "radical transparency" works and why your customers will respect you for it.

Secret Formula for Generating Crazy Amounts of PR
By Tom Szaky So what's the trick? Well here are five simple tips: 1. DO NOT HIRE A PR FIRM: This is the golden rule in my opinion for one simple
Have a burning question? Ask now!

Meet the Experts