1099 Reporting Question

Hello

I've got an accounting question that I'm hoping someone can let us know if we are just doing this completely wrong.

We have several contractors, which we have set up as vendors in Netsuite.  These contractors sometimes will have expenses that they incur.  In their timesheets, they will send us their hourly rate information, and a separate price for expenses.

We then will create an invoice and send them a check for the entire amount.  In the invoice, we specify what is contractor income, and the expenses are assigned to the expense account that the amount is for.

The problem is, when we do the 1099-MISC report, it shows the entire amount, including the amounts that were paid for expenses.  We then have to manually deduct the expense amounts and then provide the numbers to our accountant.