Using expense claims module for travel reimbursement

I’m confused by information in the Wiki and Forum about Expense Claims. Some responses say the Credit Account is a holdover that will disappear, but it hasn’t. There is a suggestion I should be able to associate payers with specific equity accounts, but only Income, Expense, and Liability accounts show up in the menu, despite having established an equity account for myself.

What I’m trying to do is use Expense Claims to enter travel expenses that are billable to clients but were paid by personal cash and credit cards of the traveler. My company has a detailed expense report form on which the traveler records daily expenses. The form sorts these into ledger accounts that match those set up in my chart of accounts (Motor Vehicle Expense, Meals and Entertainment, and Travel). I can then enter the category totals into the expense claim, splitting the entry into multiple lines for various expense accounts; they appear in the Expense account summary correctly.

The only way I can avoid the reimbursement defaulting to Suspense is to place it into my Accounts Payable liability account. Then I can spend money from a cash account to clear the payable. But that requires a second transaction and doesn’t seem logical.

My business is a sole proprietorship, and the traveler is almost always me. If I pay for travel from personal funds, I suppose that might be viewed as an equity contribution.

I’m curious what others think about the right way to do this and when we can expect the promised changes to the module. Thanks very much.

I will respond to this properly when relevant improvements to Expense claims are released. It won’t take more than 2 weeks from now.

In nutshell, some expenses on behalf of the business are reimbursable (employee paying for something), some are not (business owner paying for something and doesn’t require to be reimbursed). Improvements are going to reflect this. There is a bit more, for example removal of credit account field etc.

The Credit account field is still there. It seems that the only way for the expense to show up is if the credit account field stays on suspense. If I change it to anything else it doesnt show up anywhere. Any help?

I will be definitely getting rid of Credit account field this month. Trust me, it bothers me too and it does create a lot of confusion for those who are not as familiar with double-entry accounting.

Hmmmm, once I understood I use “out of Pocket” OR “private creditcard” which is straightforward and helpful. If that disappears I wonder how to allocate again correctly.

Expense claims affect Net Profit which is correct but I believe should be also reflected in Cash in Bank and it is not.

I think it could be simpler for people like me to easily have balance expense claims as costs reflected in cash and net profit and then invoices issued to cover those expenses to be recognized as profits.

I’m sure most of us are SME so would reimburse costs based on simple invoice above anything else.

Credit account will be deducted from name of Payer. Basically you will have list of pre-defined list of payers who can pay for out of pocket expenses and each can be linked to credit account.

Well, first of all, when you log expense claims, it means the expense was paid out by someone else on behalf of the business. Therefore cash at bank is not affected otherwise you would just log the expense under Bank accounts tab.

The cash at bank is affected when reimbursement takes place from business bank account but that’s separate transaction which happens days or weeks after expense claim if ever. Keep in mind, most business owners don’t actually reimburse themselves since they own the business anyway and are taking out whole profit. It’s still important to log these expenses for tax purposes though.

Anyway, I consider Expense claims module not quite finished. Hope to support both workflows in elegant way - expenses that are to be reimbursed (employees paying), and expenses are are not expected to be reimbursed (business owner paying).

Credit account will be deducted from name of Payer. Basically you will have list of pre-defined list of payers who can pay for out of pocket expenses and each can be linked to credit account.

Has this been implemented already? Right now I can see that there are no payers by default (even if there are employees).
When creating a Payer, it does not seem to be linked in any way with an employee (it would make sense to add a payer from the list of “Employee clearing account > xxxx” so that expense claims can be repaid easily at the same time as the salaries).

I have noted that “members” in "capital accounts do appear as payers, but it will be good to show between brackets in the dropdown list whether they are members or employees, given that the resulting entries are not the same, otherwise if a owner is also an employee, it is not possible to known which option in the dropdown box is correct).

Fantastic software by the way! After trying and wasting time with a lot of other solutions, I can say is actually the only one to properly and cleanly handle multi-currencies (apart from the simple but very efficient homemade Access/VBA system I was using before :)). And also an unexpected appreciable aspect of your Desktop version is its incredible speed compared to all SaaS solutions!

Having now used the Expense Claims module quite a bit and done some experimenting, I believe I can explain some of what you are seeing.

You are correct that expense payers are not linked in any way to employees. However, they may be linked indirectly to owners, depending on your form of organization and chart of accounts.

First of all, understand that Expense Claims are used to record payment of company expenses with non-company funds. Examples are travel expenses that will eventually be reimbursed to the traveler or mileage expenses that are deductible for tax purposes but may never actually be reimbursed (such as when a sole proprietor drives a personal vehicle on company business.

When entering a new expense claim, you must record the expense as being paid by a defined payer. Payers might be employees, partners, or proprietors. If they are employees, you will need to first set them up as payers. If they are partners or proprietors, you may set them up as payers, but you also have other choices. Manager includes all defined payers in the payer drop-down menu. But it also includes members for whom capital accounts have been defined. If you define a name as a payer for which there is already a capital accounts, you will see that name listed twice, which could be confusing and should thus be avoided.

My personal recommendations are as follows:

  1. For employees, create a payer. Record out of pocket expenses against the account of that payer. Then periodically reimburse from a company account. You might put that on a payslip or create a separate transaction, either as a journal entry or by using the spend money feature.

  2. For partners, you should already have created capital accounts. So do not define payers. Simply enter expense claims against the appropriate partner. Their equity in the company will automatically be adjusted, since an unreimbursed payment of a company expense is financially equivalent to an additional contribution of capital. If you want to be old fashioned, you could reimburse via a drawing account and then close the drawing account at the end of the year, but Manager really makes it unnecessary to close (or in many cases even to have) such temporary accounts. You just define report and Summary periods by the desired accounting interval so the displayed balances do not grow endlessly.

  3. For a proprietorship, define a payer and periodically close the expense claims to whatever you call your owner equity account. Until you do that, the claim will be carried as a liability. You need not define the owner as a member, since the single owner’s and company’s equity positions are the same thing. How often you need to close expense claims to owner equity depends on how current you want the summary to be. Of course, you could also create a member capital account for the single owner and handle expenses claims just as outlined above for partners, but that ends up requiring a few more steps.

If you use an outside accountant, he or she may want to impose other preferences. The great thing about Manager is that you can be more or less traditional in terms of temporary accounts, summary accounts, and period-ending closings. In my own case of a sole proprietorship, I’ve realized I can completely avoid several steps in the classic accounting cycle, yet still produce exactly the same reports and have the same visibility into my equity position and performance. If I wanted to apply for a loan, for example, I could produce exactly the same financial statements and reports bankers have been looking at for centuries. But it would have been much easier for me. That’s the beauty of Manager, in my opinion.


Thanks Tut, that was really comprehensive.

Expense claims are still work in progress, I didn’t nail all the use cases yet. Next, I’m planning to add employee integration so employees don’t have to be created as expense claim payers.

Firstly, I second the compliments on the use and functionality of, very happy with it.
W/r to the quote, especially on mileage: would it be feasible to implement “date”, “number of miles” and “rate”, including calculation miles * rate and showing the line total? In this way a monthly claim can be made up. Each if the line items would be debited against the proper account, keeping balance.
I´m now kind of using the procurement module for that matter, but I think this is steeking unwanted boundaries…

Be careful, @Maerel. I do not know how you are accounting for mileage within the “procurement module,” by which I assume you mean Purchase Invoices. But my point about mileage was that no money ever changes hands, yet the expense may be deductible for tax purposes. A purchase invoice creates an account payable that must eventually be cleared by a payment from a bank or cash account. The reason Expense Claims works for this is that the mileage is treated as though it was paid by someone else’s funds, rather than company funds.

Thanks, Tut.

Quite right. Next to that I was looking to the issue from the wrong side, ie. being the one that writes the claim, rather than the company that receives and books it.

I found the better way: receive the claim, book it as payment and then create journal entries to split the total amount towards the relevant cost accounts. So for that matter the calculator issue of miles * rate becomes irrelevant.

Allocating an expense claim to the appropriate expense account(s) should occur when the expense claim is created, not by some later journal entry.

Creating the expense claim generates a liability for the company. That liability can then be paid off by reimbursing the employee from the Spend Money function.

The only time a journal entry is an option is when an owner is the payer submitting the claim. Then, a journal entry can be used to clear the claim to an equity or capital account rather than making an actual reimbursement. An owner making an expenditure on behalf of the company is equivalent to an additional contribution of capital. Or, the company can reimburse the owner as it would any other employee.

Bottom line is two steps, not three:

  1. Create the expense claim, which allocates expense to correct account.

  2. Clear the expense claim by reimbursement or transfer to equity or capital.

…which is the case here, :-).
Thanks !