I am not sure why the option is not available within the Expense Claims form. The Expense Claim is only an alternate form of a Purchase Invoice.
An Employee/Owner gives you an Expense Claim, a Supplier gives you a Purchase Invoice - both create a payable liability. If Manager didn’t have the Expenses Claim tab, then those Employee/Owner’s would just be another Supplier.
As the user has the flexibility of that exclusive/inclusive option within a Purchase Invoice, therefore it should also be available within the Expense Claim - an example being.
The Expense Claim Payer has gone to the supermarket and purchased 100.00 of items of which 20.00 (tea/coffee) are for the business and the rest is private. The supermarket provides a tax exclusive invoice so the business proportion is 20.00 plus taxes.
Currently, for the Expense Claim the user has to manually calculate the tax inclusive amount (20 + taxes) prior to the entry, whereas, if that same supermarket invoice was entered as a Purchase Invoice then the user could just enter 20.00 and select an appropriate tax code.
This is because the business is not making the decision on whether or not to include tax in the price. Nor is it recording whether a supplier did so, as occurs with a purchase invoice. And it is neither collecting nor directly paying the tax. An expense claim is always for a tax-inclusive amount, any tax having already been paid by the expense claim payer. Therefore, attributable taxes are always derivatives of the amount paid, that is, tax-inclusive.
Can you describe a situation where that is not the case?
Sorry, @sharpdrivetek, but I do not see how that situation is different from what I described. The capital account member buys a tea kettle for the office lunch room with personal cash. It was the capital account member, not the business, who paid the tax directly to the merchant. The expense claim is entered for the total amount of out-of-pocket cash (including tax). The member’s capital account increases by the total, tax-inclusive amount (a credit). The relevant expense and tax liability accounts are increased and decreased accordingly (by debits).
the capital account member was only the payer. the business is still the recipient of supply or services.
yes. but why not give the user control over how it is recorded? there is no guarantee that the user will receive only tax inclusive invoices. maybe the user wants to record exactly as the invoice received which is tax exclusive, few lines tax exempt, and maybe also want to show the rounding of total.
there is no point in imposing a single way of recording transactions when there is more than one method in real-world scenario.
in other words, an expense claim is simply a cash purchase where you utilize personal funds other than those defined in bank and cash accounts. so apart from the added functionality of selecting an expense claim payer, it should be similar to the New Payment form.
Take your rounding argument. The expense claim payer did not round anything, the merchant did. The expense claim payer submitted a claim for an exact amount equal to what was paid.
An expense claim is not the same as other cash purchases. Most importantly, no cash has left the business. In your example, only a capital account balance has changed.
When the business makes a cash purchase, there may be a legal requirement to record the business tax ID number of the seller/supplier. Most likely, the expense claim payer does not have one. Yet that is who the business’ transaction was with.
What this discussion points out is that expense claims are not always suitable ways for businesses to purchase goods or services. Even if they work in Manager, they may not allow the business to comply with necessary legal or tax requirements. Sometimes, that capital account member should not be allowed to buy things for the company with personal funds.
I suspect we will have to agree to disagree about this.
the rounding was just an example to emphasize on the user’s need to present a record in a manner matching the actual purchase.
the cash has left the business in case of a sole proprietor. just because the personal funds are not managed as an account in Manager does not mean personal funds are not a part of the proprietor’s business.
wrong. you purchase on behalf of the business (not in your personal name) yet you pay with your personal cash. both the supplier and recipient have a business tax id.
yes it is suitable. no tax authority is bothered about what accounting software a business is using nor in what tab of the software a business is recording transactions. all they need are reports where transactions are recorded correctly for various accounts.
the guide on expense claims clearly explains that these can be used for cash purchases with personal funds and yet the user do not have the freedom to present the document in a format similar to a cash purchase entered in Receipts & Payments tab.
for a user of above requirement, they have two choices with the present form design.
do it the harder way by entering a New Receipt to a cash account as contribution from a capital account and then record a New Payment for the cash purchase from the cash account.
do it the easier way accepting that Manager decides how a form should be presented and enter an expense claim for the purchase ignoring the details of presentation of actual invoice received.
i have explained to my capability how such a suggested feature would benefit users (even if not all users). @Tut please explain in what way this would affect the rest of the users other than them having to put a check mark in the suggested box as a default under Form Defaults just once.
No, it has not. An expense claim is used only where a purchase is made from funds that are not represented by a bank or cash account in Manager.
By definition, yes it does mean that. When that line is crossed, you need to enter a receipt to record the contribution of capital.
I don’t know what your tax authority would say about this, but in most jurisdictions, giving the tax ID of an entity other than the one making the purchase would be a crime.
That is not the issue. As I mentioned earlier, the question is not whether the business is entering a tax-inclusive or tax-exclusive price. The fact of the matter is that an expense claim records a liability to an expense claim payer or an effective contribution of capital by a capital account member that already includes any tax paid. Thus, the tax is never an amount added to a line item or subtotal. I completely understand that this could be programmed for financial equivalency. My message is that doing so would never reflect what actually happens with an expense claim.
Incorrect, the expense claim is an alternate form of a Purchase Invoice.
A Supplier gives you a Purchase Invoice
An Employee/Owner gives you an Expense Claim
Both only create a liability. No cash is involved.
Not so. Let say they have gone to the supermarket and purchased 100.00 of items of which 20.00 (tea/coffee) are for the business and the rest is private. While 100.00 has left their pocket it hasn’t left the business. Subsequently, via the expense claim, the business will reimburse the pocket 20.00. If the business doesn’t reimburse the pocket then the business has received additional funds.
However, if the pocket was part of the business accounts, then the pocket would have been setup under Cash on Hand and you would be creating a New Payment instead of an Expense Claim.
@Tut@Brucanna my intention of creating the topic was not to argue about the use of expense claims. it was simply to make the form similar to other forms where the user would enter a purchase for the business (Purchase Invoices / New Payment).
in my country it is common for small traders to buy stuff for business with personal cash. whether the business would reimburse the same or not is irrelevant for this discussion. that is not part of the expense claims anyway. its simply recording a purchase transaction that occurred with personal funds.
i agree. yet the user has no flexibility to enter the transaction similar to a purchase invoice.
suppose the supermarket gives tax exclusive invoice which is 20.00 plus taxes, the user will have to manually calculate the tax inclusive rate for the 20.00 amount spent rather than just entering 20.00 and selecting an appropriate tax code.
Not so. For illustration, let’s assume a tax rate of 10%. The tax-exclusive invoice would be 20.00 + 2.00 = 22.00. For the expense claim, enter the total paid, 22.00, and select the 10% tax code. Done. No need to calculate anything.
The only inconvenience this presents is if you combine business and non-business purchases when buying with personal funds. You ought not do that in the first place, as your business records are then entangled with personal records. It is a simple matter to obtain separate tax invoices at the store.
my question with the example was how will i know the tax inclusive rate is 22 unless i calculate it outside Manager.
my discussion is based on real-world situations. a user would not be thinking about Manager accounting software and the procedure adopted to enter the transaction while they are at a store.
this topic now has discussed too many unrelated scenarios and yet you have not given a valid explanation on how the suggested checkbox, if introduced, would affect the present workflow or presentation of the form for users who are happy with just tax-inclusive option by default.
@sharpdrivetek, firstly I wasn’t arguing with your suggestion, I was attempting to provide clarification to statements being made so that other users reading the topic weren’t being mislead by them, such as “an expense claim is simply a cash purchase”.
AGREED - and that was the very valid point of your opening post.
AGREED - as with other topics, red herrings are introduced in responses and these distract the initial point of the topic into unrelated arguments.
Therefore, I will edit your opening post to provide improved clarity and then add it to Ideas.