Recording an expense

#1

I’m confused on how to record a company expenses in the proper way.

I understood that:

  • Reimbursement to employees or third party, should be recorded through expenses claim
  • General expenses should be recorded through the journal.

Let’s say that today, 11/07/2014, my company received an invoice for consulting fees (expense) with payment set by the end of the month, july 2014. How should i record the whole process to make the accounting work well?Can you please post some screenshots as example of the right procedure?

it would be very easy if we could record this kind of invoice (expense) in the same way we record the sales invoices (income)…updating the balance amount at the date we receive or we do payments.

#2

Actually, you should never use Journal entries tab to record expenses. I mean you can if you know what you are doing but that’s for another topic.

First of all, there are two types of expenses. Expenses which you’ve received a bill for but haven’t paid yet (e.g. electricity bill from utility company) and expenses you’ve paid for straight away (e.g. purchase of office supplies in stationary shop)

If you receive a bill from supplier which you are going to pay at some later date, the bill should be recorded as purchase invoice under Purchase Invoices tab on the date the bill has been received.

Then at some later date, the actual payment for purchase invoice should be recorded under Bank accounts tab, Cash accounts tab or Expense claims tab. Depends on whether you paid out of business bank account, cash (e.g. cash float) or someone else has paid on behalf of the business (e.g. business owner using its personal funds)

If you’ve just paid cash upon purchase, then you skip the process of recording purchase invoice and just record payment under Bank accounts, Cash accounts or Expenses claims account, again based on what was the source of funds that has been used to pay for the expense.

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#3

Thanks Lubos, now i understood.

#4

Reviving this topic: I just entered my first Expense: I have a couple of questions:

  1. Can I customize the name of the Tap “New Expense Claim” to something different?

  2. What goes under Payer? There is a drop down but I do not know what goes there or where it is feeded from.

  3. Where would I put the payment method: Check/ Dr. Card…

#5

First, go to the Guides and read everything about expense claims:

http://www.manager.io/guides/expense-claims/

Answering your three questions:

  1. No, I don’t believe you can customize the name of the button “New Expense Claim.”

  2. When you have created a list of authorized expense claims payers, as described in the Guides, those names will appear in a dropdown list. These should be the people who can spend their personal money on company expenses with the expectation of reimbursement or additions to equity. An employee, for example, may be authorized to claim reimbursement for travel expenses paid from personal funds. An owner or partner may be able to purchase equipment and have the amount added to his/her capital account, as though a new contribution of funds had occurred.

  3. You do NOT record payment transactions in Expense claims. This tab is where you record the claim for reimbursement. If the expense is approved, you may pay the employee from a bank account. That is when the payment is recorded, and you will be crediting a bank or cash account, so the method of payment will be automatic. If the claim is made by an owner, a Journal entry will be needed to clear the claim to equity or capital.

#6

After reading your post again, I realized you may actually be discussing ordinary expenses. For how to record spending money on company expenses in general, also read the Guides here:

http://www.manager.io/guides/receipts-and-payments/

#7

Hi Tut,
The link you gave no longer exists and I very much want to know “how to record spending money on company expenses in general”.
I can’s see anything in the guides. I am an artist - no employees - it’s just me.
Surely I don’t have to raise invoices for Direct Debit payments?
And for every small purchase of a pencil or a tube of paint?
Kind regards,
Penelope
PS Maybe I should start another topic rather than start this up again?

#8

When you are on the Forums webpage - across the top next to Forum is GUIDES.
Click on that and all the available guides will be displayed but to quote @lubos previous response to this topic:

First of all, there are two types of expenses. Expenses which you’ve received a bill for but haven’t paid yet (e.g. electricity bill from utility company) and expenses you’ve paid for straight away (e.g. purchase of office supplies in stationary shop)

If you receive a bill from supplier which you are going to pay at some later date, the bill should be recorded as purchase invoice under Purchase Invoices tab on the date the bill has been received.

Then at some later date, the actual payment for purchase invoice should be recorded under Bank accounts tab, Cash accounts tab or Expense claims tab. Depends on whether you paid out of business bank account, cash (e.g. cash float) or someone else has paid on behalf of the business (e.g. business owner using its personal funds)

If you’ve just paid cash upon purchase, then you skip the process of recording purchase invoice and just record payment under Bank accounts, Cash accounts or Expenses claims account, again based on what was the source of funds that has been used to pay for the expense.

#9

Thank you - but I understand the principles of double entry accounting and so forth, it was learning a new program that was my problem. Really all I needed to know was ‘use Spend Money’.
I have been using MYOB for years but they were taken over and now are in the cloud. Still it was a very good program and had a lot of features that Manager could learn from. Having to type 10 strokes for a date for instance. MYOB would remember the date of your last entry and you only had to type a new day and tab.
Anyway, thank you all - I’m sure I will get the hang of it.
Regards,
Penelope