Disbursements tab

Wait a week or so. Still working on this. Guides will have new section for disbursements where you will be able to learn the whole concept.

Description is currently at an inconsistent level. For Purchase invoices, there is a description field available on each line, so a separate description for each of the Purchase Invoice line items can flow through to the corresponding billable disbursement entries for each line charged to disbursements on the purchase invoice.

For spend money and expense reports there is no line level description field, just header level and to your point it does flow through.

While this is probably OK for spend money, my thinking is that when someone does an expense report they are going to do one expense report for the week (or whatever period) with a line for each item. So the header description might be ‘Expenses week ended February 13’, but there would be multiple lines for each expenditure type - Lodging, meals, per-diem, airfare etc.

Ideally, just like purchase invoices, there would be a way to get line level descriptions over for the expense lines to carry the “nature of the expense” (lodging, meals etc) over to invoices when billed on to a client.

For my current use of Manager (glide club) I’m fine, but if I put on my old “when I was a consultant” hat I was required to break out each category of expense on invoices. Meals, Lodging etc. Anyway that’s why I wondered if there was any chance of a line level description. Perhaps the line descriptions could even default from the header then one could modify them. e.g. Header says “expenses week Feb 12”, if that defaulted to the line level one could append “Meals”, “airfare” or whatever. (or going back to my earlier though of picking an purchase item or ‘expense category’ item that could drive it).

One additional though, if an employee enters an expense report and the lines are not recoverable, the “boss” see the nature of the expense by the account charged “meals” etc. But, if some or all lines are billable to a client so they pick ‘Disbursements’ as the charge on the line, not only don’t we have the nature of the expense to carry over for billing, but when the “boss” reviews/approves/pays the expense report, they can’t tell the nature of the expense lines either from the line detail in Manager. If they had a line level description they could explain, if they had a ‘purchase item’ or ‘expense claim item’ or such even better we could run a report of who claimed how much meals etc over the course of a period and how much of that was billable and that approach would categorize the expenses in the same manner for reporting whether they were billable or not.

Apologies, I probably went way too deep on that but certainly I’d bet that once folks start to use this for billable expenses there will be a need for line level categorization.

Thanks for allowing us to give input. Great stuff you are doing.

One additional thought from a billable expenses perspective. If one were using tracking codes to keep track of Projects, I noticed that when entering a ‘TRACKING CODE’ on the expense claim line, that code did not flow through to the invoice line when billing the disbursement. That would be pretty cool, particularly if one were to mark up any of the expenditures passed through, then the disbursements income would automagically have the project specified :-). Same could be done for spend money & purchase invoices. Can you tell I used to be a consultant with multiple projects?. Heck, display the tracking code on the disbursements selection form when creating an invoice and you now have a project billing system as one could pick all the items related to a specific project to bill together! Anyway, I may be over complicating things but since the fields are all there already it’s so close I thought I’d mention it.

Cheers.

There is actually. If you have single line item, use the header level description field. The moment you click Add line button to split payment across multiple line items, Description column on line items will appear.

OK, the latest version (15.0.31) now fully supports this.

I missed the line description
Functionality, thank you for the clarification. Tried it out and works great.

And thanks for adding the project support. Nice. I see the tracking code on the disbursement tab and that it flows through to the invoice.

Only observation is that once I click new invoice at the top of the disbursement tab and select a customer when the list of available customer specific disbursements comes up to select on the screen with the create button on it the tracking code doesn’t show there. My original thought was to add it to that form so that you could select the lines for a given project and bill them together.

I can’t believe the response and effort you put into Manager. Thank you again.

I’ve finally had a little time to experiment, using v15.0.31. Things on the Disbursements tab are definitely progressing. The ability to create a sales invoice from either Billable time or Disbursements is great. But the inability to add expense claims to the invoice makes it unusable for some business (including mine, so far).

I also notice that when looking at account lists, some transactions lack description fields, so you can’t tell what was actually happening in the account, although the transactions all appear correct. I haven’t spent enough time with the module yet to know if it is a problem, but I wonder why some transactions cannot be viewed or edited. For example, when you drill down from the Summary page into Disbursements recoverable or Disbursements income, tranactions applied against Accounts receivable show, but lack descriptions and viewing/editing access.

Tut, on expense claims if the line item is billable, charge it to disbursements, it then appears on the disbursments tab (with the line description from the claim), the recoverable expense claim lines can then be billed from disbursements in exactly the same manner as those sourced from spend money or from Supplier Invoices.

Additionally if you use Tracking codes to track expense claim lines against a project those tracking numbers flow through to the disbursements tab now and also onto the billing invoice. So if on the invoice you mark up any of the expense claim lines when billing the income will be recorded to the disbursements income account with the tracking code flowing though also.

Cheers.

Thanks, @alasdair, I experimented with that approach. But it requires you to forego characterization of expenses according to your chart of accounts. Say you claim a meal expense that you believe will be billable. The transaction is forever characterized as a recoverable disbursement rather than a meal expense. Now suppose the customer goes out of business and never pays. You then have an expense that should properly be classified as a meal expense, but you are thrown into a complex chain of transactions to make it so as you write off the bad debt (unless you break the rules of good practice and go back and alter the original entry).

Suppose tax law in your jurisdiction allows full deduction of meal expenses when reimbursed by customers under certain circumstances, but only partial deduction when made only for company purposes (this exact situation exists in the U. S. tax code). You would be required to have that expense properly categorized.

Or suppose the customer is required to report to the tax authority payment of fees for services, but is exempt from reporting reimbursement of properly documented expenses. (Again, this situation exists in U. S. tax law.) If, due to different advice from accountants, the customer reports the full amount paid rather than just the services portion, a company can recover by claiming a separate deduction, but it would need to have the expenses involved in the meal expense account, not a generic recoverable disbursement account.

Neither of my examples is the expected flow of events, but either could foreseeably occur. My argument would be that to be fully useful, the Disbursements tab will have to accommodate the unusual. I can’t even begin to imagine the various rules users around the world might have to follow.

True. Take a scan back though the earlier posts in the thread. I had suggested perhaps making purchase items available to expense reports or creating an ‘expense category item’. The thought was that would work pretty much like a supplier invoice. You could select the item to categorize the expense ‘Meals, Lodging etc. then if it was billable override the account to disbursements but the item would keep the ‘nature of the expense’. Another simpler approach that doesn’t involve items or categories would be to leave the expense report pretty much as is and code each line to the account that represents the nature of the expense. Have a check box at the end of the line for ’ Billable’, if checked up comes the customer box, fill it in and have the Dr to Disbursements instead of the ‘account’. If you are unable to bill it later and write it off the account on the line (representing the nature of the expense) could become the default expense account for the write off of that line item?

That said, what I’d do for now is make sure that the nature of the expense is in the line level description on the expense report since that is visible and flows through to the invoice. It does rely on consistent data entry in a free form field. It’s workable as-is and an amazing first step. Anyway take a read at the earlier posts. One additional thought was that on the write-off screen it would be nice to be able to select or override the write-off account. Again still workable to have it go to disbursements write-offs and do a JE.

Anyway, I agree with you but I also feel that what Lubos has already put together, particularly having added the TRACKING code flow-through I requested for project billing is an outstanding and a very useable start. I am really happy to have stumbled on Manager and fully expect the functionality in this area to only improve with time. It’s kind of fun to get to participate a little in that.

Cheers - Alasdair

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I am fairly sure I agree with @alasdair when he says that being able to select or override the write-off account would resolve my concerns. It is difficult for me to be certain without being able to experiment.

But I like his first idea better. Being able to check a box when an expense is billable and have the customer box pop up sounds brilliant. That way, you would be entering all expenses in similar fashion, with the optional step of identifying a customer. That avoids using his workaround of describing the nature of the expense but still having it in the wrong account. He correctly points out that depending on consistent entry in free form fields could easily create problems.

I echo the sentiment about enjoying the opportunity to contribute to development of a new capability. Perhaps @lubos is just kind enough to allow us our delusions. :wink:

It very important to display them (Disbursement income and Disbursement unrecoverable)

I’m following this thread now for a while and I have started playing with the disbursement tab. What I do not understand yet is whether I can use this tab for invoices that are billable to a client or whether I have to wait for a billable expenses tab.

For now, I used this tab for invoices as well and it perfectly suits my needs. What I noticed is the following. When creating a P&L statement, the invoiced disbursements are not listed in the income section. Is this correct? Or is it something that has to be implemented yet?

I’ll try to give a quick overview.

Manager uses the term ‘Disbursements’ to mean monies disbursed for costs that can be recovered by billing to a customer. Monies could be disbursed by (I) “Spend Money” - i.e. payments recorded from a Bank Account, (ii) supplier invoice purchases or (iii) reimbursement of expense reports;

Since these are recoverable outlays the “Spend money”, “invoice line” or “expense report line” should be coded to Disbursements (to record a billable asset) rather than to an expense account since they are ‘not expenses to you they are pass through costs’. Thus this functionality covers and includes “billable expenses”.

On the disbursements tab you will see all recoverable disbursements for a customer awaiting billing. Some may come from Spend money, some from supplier invoices and some from expense reports. Pick and combine all the lines you want to Invoice and bill the customer.

Thus the general accounting is

"Spend Money":       Dr Disbursements (recoverable) xx / Cr Cash at Bank
"Supplier Invoices": Dr Disbursements (recoverable) xx / Cr Accounts Payable
"Expense Reports":   Dr Disbursements (recoverable) xx / Cr Expense Claims payable

Upon Invoicing (assuming no mark up):

Dr Accounts Receivable
Cr Disbursements (recoverable)

Note that none of the above touches the P&L. There are two P&L related scenarios:

Mark-ups
If you edit the invoice and increase the amount to be billed to more than the outlay was for the original disbursement you have “marked it up”, so the accounting for the invoice line that you marked up would be (using an example of disbursement of 100 billed for 110):

Dr Account Receivable 110
Cr Disbursements (recoverable) 100
Cr Income from Disbursements 10 (your profit)

Write-offs
If prior to billing you discover that you will be unable to recover a disbursement and need to write-it off you can write of the disbursement

Dr Disbursement Write-Off's
Cr Disbursements (Recoverable)

Another interesting thing is that the invoice functionality when performed from either the Disbursements tab or Billable time tab will allow you to select both billable disbursements and billable time, so you can now combine billing for time and expenses on one invoice if you wish. Nice work here by Lobos as always.

Hope that helps explain why the disbursements do not appear as income when creating your P&L. It’s all just expense reimbursement of costs incurred on behalf of your customer, it’s not a sale/revenue (Unless you mark them up of course to get some ‘income’).

Hope that helps.

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When invoicing a disbursement, I expect the disbursement amount to appear on the summary page as Disbursements income. However, this is not the case. Is that correct?

Correct, that is not the case. Billing a disbursement only creates income if you mark up the amount to be billed above the cost incurred. If you simply “pass along the cost” to your customer he is simply reimbursing you for monies laid out on his (or her) behalf and you have no income or expense.

Think of it this way:

  • You outlay some money for a cost that is not your expense it is your customer;
  • When you do so you record not an expense but an Unbilled Receivable because you have a billable asset not an expense;
  • When you bill out those unbilled receivables they move from Disbursements (i.e. unbilled expenses) to Receivables.
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Thanks for your elaborate clarification @alasdair. It makes more sense to me now what is going on and why the figures are the way they are.

What I still have to find out is what report to use to have the invoiced disbursement amounts visible. Those figures are necessary for me when doing a tax declaration.

Yes, of course. That totally makes sense. Tnx!