Expenses claims and transfer between payers

excuse me if there are any similar topics I could not find one discussing the issue of selecting another expense claims account in the same input form.
I transferred 2,200.00 to an expense claim payer, he had expenses 1,014.00 then he transferred the rest to another expense claim payer. so when I tried to record the transferred amount between them in the same expense claim form I can select the control account “Expenses Claims” but I can’t select the Payer “here he is debit”.
the amount was suspended because there is no valid debit account.

According to the guides Use expense claims | Manager you just need to allocate the accounts for which the expenses were made by either employee, owner or manually created expense claimants. For example if an auhtorized expense claimant paid $30 and # for a keg of petrol then you $50 for servicing then each line item would be written to the respective accounts such as $30 to Fuel Account and $50 to Maintenance account. You should not select an expense claims account as these are automatically created. You will have to clear these accounts by a payment transaction to the claimant.

I’m not trying to duplicate the payer here, I need to transfer the amount of 1,186.00 SAR from claimant “A” to claimant “B” in the same form besides recording 1,014.00 SAR as a claim by claimant “A”.

The expense claim forms just explained what was expended by an authorized claimant on behalf of the business. The claim form only explains per line what the claimant paid such as the petrol in my example. So the expense claim form has nothing to do with the actual transaction. The settling of the payment to the claimant is done through payments. So in your case the following should have happened.

You transferred 2,200 to expense payer A but only had an expense claim of 1,014. Then that person transferred the balance to another expense payer B. You should not have any issue as all expenses should be shown on the expense claim. You settled the whole claim by paying person A that that person allowed another person to buy the remaining stuff is only part of a transfer between them.

Alternatively expense claimer A should reimburse you the balance and settle an expense claim form with A for the amount of 1,014. You then create another expense claim for B and make a payment to B based on the amount in the expense claim. Nowhere in the expense claim form should you select an expense claims account because you should enter what was purchased on your behalf and allocate the proper account such as in my petrol example.

Dear @eko thanks for your patience and the detailed explanation. but I have a different situation here.
I paid in advance 2200 SAR for claimant “A” then he submitted expenses claims by 1014 SAR and transferred 1186 SAR for claimant “B”, now claimant “B” didn’t prove his claims, so I can’t record an expense claim for “B”.
all I can do now is that recording the amount against “B” until he submitted his claims later then I will enter a new expense claim for “B”.
If “B” submitted his claims with “A”, It could be easy to do it as per your explanation above, but he didn’t.

I think this is what you should be doing:

  1. Record a Payment to claimant “A” for 2200 SAR.
  2. Record an Expense claim for 1014 SAR with claimant “A” in the Paid by field.
  3. Record a Journal entry with a credit of 1186 SAR against claimant “A”’s Expense claims account and a debit of 1186 SAR against claimaint “B”’s Expense claims account.
  4. When claimant “B” submits his claims, record an Expense claim for 1186 SAR with claimant “B” in the Paid by field.

This is a good suggestion, actually, it will solve my situation, but isn’t there any hope to add the ability to transfer from claimants to each other like an internal cash transfer?

That’s exactly what the Journal entry is doing. I doubt that this is a common enough procedure to warrant getting its own transaction type. Where or how would you like to see this transfer implemented?

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@Ehab, your description of the situation reflects extremely poor and risky practices for several reasons:

  • The transfer between Claimant A and Claimant B is entirely off your books. That is, you had no control over it and were not involved. Therefore, it does not belong in your records at all, under any circumstances.
  • Claimant A was advanced money for a specific purpose, which was not satisfied. Therefore, A should have returned leftover money to the business. Technically, A has stolen the funds that are reported to have been transferred to B. You should not further complicate that matter by trying to cover up this financial misfeasance after the fact.
  • Nothing should be recorded in the name of B unless and until B submits an expense claim. B was not authorized to spend money on behalf of the business (according to your telling) and has already been reimbursed (apparently without authorization) by A. So B is whole anyway. You should definitely not advance funds to B, hoping to obtain an expense claim later.
  • You will never be able to prove whether A transferred company funds to B. So you will not pass audit on that transaction.

In my opinion, what you should do is:

  1. Recover the funds not directly spent by A from A. Deduct this from A’s pay, if necessary. It is A’s responsibility to recover the funds transferred to B without authorization. That was not an action by the business and does not belong in the business’ records.
  2. Require B to submit an expense claim for any legitimate company expenses paid. Settle this claim in your normal fashion, either by separate payment or by an addition on a payslip.

As for your suggestion to add an ability for one expense claim payer to transfer funds to another, that is a very poor idea from an accounting perspective. Accounting records should only record financial activity to which the business is a party. Consider an extrreme example. If Claimant B kidnapped Claimant A’s child and held her for ransom, would that be eligible for a payer-to-payer transfer? Of course not. But from an accounting perspective, it has just as much validity as A giving B money to buy petrol for B’s company car or to reimburse B for a hotel room on a business trip. Although the purpose seems less nefarious than the kidnapping scenario, there is no financial difference. Both are off-record transactions.

Granted, if A paid the hotel for both A’s and B’s hotel rooms, that would be a different situation. While the difference may seem slight, look at it from an auditor’s perspective. A’s payment to the hotel for both rooms is verifiable, involving one authorized payer using what are now personal funds to pay an expense the company could have paid directly to the hotel. If you participate in recording A’s transfer of company funds to B rather than requiring B to submit a separate expense claim, you have neglected your responsibility to verify that the expenditure was legitimate and necessary in the ordinary course of business. You have given that responsibility to A. In most jurisdictions, that would not be allowed; in some jurisdictions, that act alone could invalidate your entire business expense reimbursement regimen for all employees and claimants.

Another way to look at the scenario is to remember that expense claims are designed to record payment for legitimate business expenses from the payer’s personal funds. Giving the payer an advance is effectively turning the money provided into the payer’s personal funds. Of course, someone can do whatever they wish with their personal funds, including giving money to a co-worker. If the advance and the expense claim balance perfectly, all is well. But when the payer gives money to someone else, they will not. In most jurisdictions, that will have income tax implications, because any unused funds not returned to the business will constitute additional pay. And that generally requires additional deductions and contributions to various end uses, which is probably not something you want to get into. Likewise, Claimant B could have additional tax obligations, and the business’ participation in facilitating any transfer could look very much like fraud.

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Forget the idea, using Journal Entry is much easier than going into this war.
I’m too lazy to continue this discussion.

That happens, call it a poor practice, rich practice, or even a low-income practice. I don’t care about your opinion about what I’m doing, what I care about is your ideas to help us with our issue.

I decided that as a second solution.

Technically you could be over here, no no fraud here, it’s just one week or more few days to have the necessary documents from B. :slightly_smiling_face:

that’s right

also right here

No need

I agree.
I asked to improve an existing feature to maximize and simplify its use. This could be a good suggestion or maybe not.
Journal entries remain the easy way to do what we need at the moment. There could be more improvements in the future!! You Don’t know…!!