Expense claim question


I am doing the accounts with my wife and we have a quick query please as we do not understand the expense claims section.

Here is what happened:

An employee went to put petrol in her car for work, this is not an allowance and was paid with her own cash but the petrol is needed used by the company(travel).

I was hoping that with manager we could do this:

Set the employee name and add an expense claim to her name, choose the account “expense claim”, the right vat threshold and the amount–> thats all good and works

But here the first problem is that the “payee” could be a supplier, at the moment the supplier’s dropdown menu does not show up, I can only put a payee name, if I do that the expense wont show up under the supplier’s account.

My second problem is this:

I was then hoping to see some kind of red signals somewhere in the software showing that the company owes 20 Euro in expense claims to employee XYZ, click on the claim and set the supplier that was payed by the employee(could be a restaurant, petrol station or garage).

But where I am lost is that there are no warning that the expense claim needs to be payed because it shows as “always paid”, but the company is unable to show for what this expense was for(ink, software, diesel…phone…)

This is a bit of a problem as in the reports I see “expense claims” but absolutely no report putting these amounts in the right accounting charts.

Is there something we are missing? I yes, how would you account for petrol that an employee paid himself with his own money but still have this in the right accounting chart when we pay back this employee?

I hope you understand,

Thank you.

suppliers are linked to the Accounts payable account.
so if an employee pays for the fuel he bought from your supplier, get an invoice for the same and enter it as a purchase invoice in your accounts.

then enter the expense claim for the employee and select the accounts as below

in the Employees tab, you will find the total you owe to any employee under the Amount to pay column. this includes the expense claims if any.

if not buying from a supplier just enter this as an expense claim selecting the suitable default account or any account you create under expenses in your chart of accounts. you can also attach a supporting document to this entry.

Thank you so much for the reply.
I will check this out today!

If the “Payee” is also a Supplier is irrelevant, you owe the money to the employee (paid with own cash) not the Supplier (as you aren’t paying them) so it shouldn’t be showing up under the Supplier’s account.

In the Expense Claim you should be choosing the account wherever you normally put petrol expenses, not an “expense claim” account.

Sorry this is incorrect, the Supplier had a “cash” sale (paid by employee) therefore why would they Supplier issue an invoice for a sale which is already paid. As stated above, the “Payee” also being a Supplier is irrelevant - the transaction is not part of the Supplier’s account with the business.

Brucanna, I am not sure on this.

Yes I understand that the employee pays the bill but many times an employee goes with our V.A.T number in a shop but pays with his own money. Therefore in that case, it is exactly as if “the company” paid the bill itself. But we also want to have a reminder that we had a cash advance from the employee.
I mean this happens with Petrol, computers, parts and others. I choosed petrol as an example.

I do not think it matters who “in person” pays the bill, what matter is which entity is recorded in the bill and this is the problem I was explaining, we just need some kind of reminder that we owe money to this person(expense claim).

Thank you.

Yes, and as you state - who pays doesn’t matter.

And that entity is recorded on the receipt in which the employee provides, that doesn’t mean that that receipt needs to be entered as the bill, merely attaching the receipt to the expense claim is sufficient.

Depending on your setup:
If your “Employee Clearing” account has a balance then you owe money to someone, or
If your “Expense Claims” account has a balance then you owe money to someone

However there are other alternatives - which you may have already considered:
1 - If a Supplier is used, authorise the employee to put the transaction on the account.
2 - Run a Petty Cash, reimbursement to the employee without an expense claim
3 - (not for the purists) Add the employee as a Supplier and enter the Expense Claim as a Purchase Invoice

recording an expense claim alone will not reflect anything on the account statement of the supplier.

the supplier has provided a service to the business and this is taxable in most cases. there should be record of purchase in this case.

@Brucanna’s explanation is the correct one. The original mistake was allocating the transaction to Expense claims rather than the normal expense account. The only reason that account can be selected is because it might be necessary for adjustments in unusual situations. Normally it is only selected when reimbursing expense claims.

Thank you for the reply. so as I can see the expense claim and employee clearing account is the same. But as Sharpdrivetek specified(which was our initial problem), entering an expense claim alone does not reflect on the account statement of the supplier.

So for you Tut, the expense claim account should not be touched, I should just withdraw some petty cash and repay the employee this way. So in Manager it will show as “Petty cash transaction to the supplier” but in that case, how can I remember I owe money to the employee? There is something I am not understanding there. I am going to play more with the software tonight to crack this one out as I am even more confused now.

I have not explained myself well enough. Expense claims and Employee clearing account are not the same. Reread the Guide on expense claims carefully. The expense claim liability posts to one for defined expense claim payers and to the other for employees.

In either case, you can reimburse from petty cash, but the supplier does not enter the picture for the reimbursement transaction. The supplier was only recorded as the Payee on the expense claim for information. After that, only the Payer is involved. That is who the business owes money to. The business has no relationship directly with the supplier at any point.

Thanks Tut and this is where I got a bit lost, in the chart of accounts I have in the software both are under the same account:

I think I will have to let this one pass, I just cannot understand sorry “The business has no relationship directly with the supplier at any point.”.

The employee is “owned” by the company. The employee does his job to go and buy a part, he pays with his own money because he forgot the company card. The company (in my logic) is still the entity that deals with the transaction because it pays the employee to do a job and ask the employee to do the transaction on the behalf of the company(by using the company V.A.T number).

The company wants to know how many transactions it had with this supplier in 2017. Unfortunately, because the supplier can only be recorded as the Payee(not linked to the supplier’s database), the supplier tab will only show the invoices when added as “expenses” directly in the software but if the company uses the expense claim/clearing accounts for the transaction, the invoice will not show in the invoice tab for the year of 2017.

I do find this really really strange, I kept reading your text again and again with my wife, we cannot understand the logic there sorry but we can understand sharpdrivetek fully on his points.

from SharpDriveTek
“recording an expense claim alone will not reflect anything on the account statement of the supplier.”<-absolutely and this is what is bothering us
“the supplier has provided a service to the business and this is taxable in most cases. there should be record of purchase in this case.”<–100% right

We will have to do the claims for expenses from the staff on an excel sheet instead and add all the expenses as "if the company paid them itself in manager otherwise our records for invoices will be out of sync in the “invoice” tab.

Where we live is not “who pays” but “who provides the service to who” that matters to the taxes/auditor and accountant.

The person who pays is only a vehicle for the money, the invoice still has to be archived with the supplier as if it was an expense paid with the company card.

And nor should it be on the suppliers account , the transaction is between the person paying and the business supplying only. The supplier wont be putting the transaction on to their customer account, therefore the customer shouldn’t be putting it on to their suppliers account.

Yes and it’s the receipt received by the employee which is attached to the expense claim. The transaction between the Person and the Supplier is a completely separate transaction to the one between the employee and the business - they don’t get merged/combined as though they are the one and the same.

Or as @Tut put it - “the supplier does not enter the picture for the reimbursement transaction” and “The business has no relationship directly with the supplier” in the transaction.

Not exactly, their usage depends on the category of the Expense Claim Payer. An Employee’s expense claim gets posted to the Employee’s Clearing Account, where a EC Payer’s expense claim gets posted to the Expense Claims account.

0 Exp Claim Emp-Payer

Some businesses don’t like to mix payslip and expense claim transactions, so in that case they create the employees as Expense Claim Payers so that they are managed separately.

That is because you have re-named the Employee Clearing Account to be Expense Claims.
The standard Expense Claims control account doesn’t appear in the chart of accounts until you have created a Payer under Setting - Expense Claims Payer as per Person A above
0000000 Bug 6a

Accounting is about recording the transaction not the relationship - the business has the transaction with the employee, not the supplier.

EG the employee submits four receipts for out of pocket expenses, two of those receipts relate to business Suppliers and two don’t. You don’t start to pick and choose how you are going to process this one expense claim - some receipts get processed one way, while other receipts get processed another way. That is a recipe for mistakes.

No, but more importantly, your records will be out of sync with your Supplier. Lets say your account with the Supplier gets messed up and needs to be reconciled. The Supplier’s ledger will have all the Invoices which they sent for payment, while your ledger will not only contain those invoices plus all the employee provided receipts - so it becomes in-reconcilable.

Always, your Manager Supplier account should be a direct representation of the Supplier’s Customer account and shouldn’t be polluted by non-Supplier transactions - cash payments by employees.

No, because the Supplier didn’t provide the transaction, its not in their books as being owed by your business so it shouldn’t be in your business books as being payable to them.

To be quite frank, what you are proposing (both employee/supplier recorded) would be a huge red flag in any tax audit, as you are giving the appearance that you are claiming the ONE expense TWICE.

Once under the supplier account and once under the employee expense claim - that alone would make any tax inspector want to dig much deeper.

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But why you are saying this? If my employee goes buy computers for my company under my company name and vat name(with our approval), the computers become an asset to my company. The supplier does not care who gives the cash, what matters to him is who is buying it(my company), he must put my purchase in his accounts under my company name. Otherwise I won’t be able to declare this as an asset nor get my taxes back from it(Europe).

If on opposite a purchaser sents his staff to buy a service from it, I am not going to put his staff name on the invoice but the company name he represents, otherwise it makes no sense at all, my supplier won’t get his V.A.T back.

I think there is a complete misunderstanding between us.

Here is how it works.

The employee goes to a shop where we have an account with.
The supplier ask the employee, what is your account number.
The supplier then creates an invoice under the account name(our company name).
The staff then sometimes do not have the time the come to the office to pickup the cash so they pay with their own money.
The supplier does not care nor it is his business to know who owns the cash, he accepts it and give to the employee an invoice.
The employee then put this invoice in our invoice box and write on a board and tells us he advanced the cash(we are speaking about very small amounts).
Our job is to then input this invoice and repay the money owed to the employee.
The employee remember, was not forced to pay for the invoice with his own cash, he did it to make things easier.

So now the supplier will have + 1 invoice under our company name
Our system will have + 1 receipt/invoice under their company name.

We now can trace of the purchase and can claim the V.A.T back.

Please watch this, it is exactly what both Sharpdrivetek and I are explaining:

The employee can choose how he paid(his own cash or company card), based on this, you create an expense claim and the supplier name shows via ajax(as you can see in the video.

This is why I am totally confused with your posts as I have been using Xero for 3 years and have always done it the way I explain it above.

In Xero you can trace how the supplier bill was paid(employee cash or company card) but it won’t matter because the expense will still relates to the supplier’s accounts and is accounted for in our company expenses. Glad I got a video that shows the whole process…

I have watch the video twice, I repeat twice, and there is absolutely no mention of Supplier or Supplier account. In fact the process outlined is exactly, I repeat exactly, the same as in Manager albeit with different screens. In the video for the expense claim it clearly states “fill in the details” and shows the “Receipt from” field which is exactly the same as Manager’s Payee field.

So you have 0000000 Bug 5 or 0000000 Bug 5a identifying the seller of the product or service.

As to your scenario regarding the computer purchase, I agree with everything you have outlined except that instead of “he must put my purchase in his accounts under my company name” you should have “he must put his sales in his accounts under a buyers name”. He is only responsible for his sales in his accounts - not your purchases, a mute but taxation law point.

Also, the official sales document which has your company name and vat number is what that enables you to declare this as an asset and get taxes back, not the payment. With regards to this, It is totally and absolutely irrelevant as to how the purchase is paid - cash, expense claim, credit card or credit terms - as it has no material impact on you being able to declared it as an asset or the claiming of the vat, but the sales document is very very relevant and that is regardless of it being from a regular or a once off Supplier.

At the end of the day this topic has become nothing more then a comparison between how one piece of accounting software v’s what another piece of accounting software does with regards to how they process/record their expense claims. One links to the Supplier account the other one doesn’t - horses for courses or both are acceptable.

Manager’s Expense Claim method/system will withstand any country’s tax authority scrutiny based on my international experience and the tens of thousands of users around the world, especially the thousands of European users who rely upon expense claims daily.

Yes you are right “One links to the Supplier account the other one doesn’t”, this was actually the problem at the start of the thread, I have no idea why it went so deep into this rather than just say like sharpdrivetek that “Manager.io does not link to the supplier’s account in that case” and I would have accepted the reply as is.

Better leave it there, at least now I know it does not link when processing things in that way, I simply thought I was missing something out. Having used Xero for many years I could not get my head around the ajax feature not finding my suppliers automatically, that’s all. I still find it incredibly weird but will live without it…

Thanks again to everyone.

A re-read of this topic clearly shows why, there was a persistent insistence that a Supplier account transaction must occur until the eventual realisation that that process didn’t relate to Manager.

So do I, that cash purchase transactions are “forced” to be Supplier only transactions. One makes a miscellaneous cash purchase (an expense claimable $5) and that never to be used again business must become and remain a formal Supplier within the accounting software for evermore.

Suppliers are businesses which provide credit terms - buy now pay later and not buy now pay now, otherwise every café I visit where I buy a customer a coffee is going to very quickly bloat the Suppliers listing.

Hi Brucanna, no this was not for a one time purchase but for suppliers we have accounts with as mentioned in the thread but I also understand that it is impossible for you to re-read all the threads in the forum as there are too many questions each day. I actually made you a video using the jing.com freeware showing the whole process in Xero but unfortunately the output file is in swf and it won’t import in my power editor video software as I wanted to blur out the company name and numbers but the whole process is exactly as I am explaining it, the employee pays the purchase to the supplier with his own money and the supplier is chosen from the list of “previous suppliers”, then when you repay your employee(expense claim), a receipt from the supplier purchase is also generated which creates a repayment to the employee at the same time. You can then select the supplier from the list and see all the transactions done under his name(even if an employee purchased the goods under the “expense claim” account(this does not matter in Xero).

No worry, I will just use an excel sheet and if this is not ideal go back to Xero as I am missing the multi-currency auto import and the paypal transactions pulled automatically from multiple of my accounts(+ this expense claim thing).

Thanks again.