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Handling of Expenses within Xero

Hello, I am new to Xero and my accountant has kindly added my current year transactions to the system for me and now it is my turn to take over for the balance of the year. I think the system looks great so far and I am beginning to get to grips with the various aspects of the system but have a question on how I correctly handle expenses.

I am able to create receipts and was able to approve and also authorise an expense to be paid to one of the company directors. When I authorised the payment the system asked me for a date and also an account where the money was taken from. I completed this information and then was able to see the payment listed as a transaction within the Reconcile Statement section of the system. (unreconciled of course) I therefore thought that was the end of the process and all I had to do was now make the physical payment to the Director from the Bank account.

I then read from the help section at the top of the Expense claim page that I should also use the Send Money option to post a payment for the claim? I just wanted to check if this was correct or not as if I do this I am worried I will be creating 2 payment entries for the expense to be paid?

As a second question, when I posted the claim on behalf of the director, it is showing up in my name and appears as my expenses as I am obviously logged into the system as myself – is there a way round this other than to log out and ask the Director to post her own claims or I log off and back on as her and do the same? Thank you very much in advance for any help you can give me. Mark

Tags: Expenses

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Permalink Reply by Catherine (Xero) on January 21, 2012 at 2:01

Hi Mark - welcome to Xero! Thanks for the feedback and you're doing well so far. I can help with a little bit of confusion here.

The reference to Spend Money is instead of doing an expense claim - you would use a Spend Money if the funds had gone straight out of the company's bank account, the Spend Money is just recording the bank transaction in Xero (or you can wait for it to be imported on the bank statement and create the transaction during reconciliation). You use the Expense Claim if the funds have gone out of someone's personal account, like an employee or director when the company needs to pay back that person from the company's bank account.

So the steps you've explained above are perfect so far - make the physical payment to the director and when that payment arrives into Xero on the bank statement, reconcile it to the expense claim you've already marked as paid - it'll match automatically or you can search for it, usually has a little head icon to signify Expense Claim.

The next question about using Expense Claims as yourself or your director - that is one thing we have yet to build - entering claims on behalf of another user. Currently we expect each user who is a member of your company would have their own Xero login, like all the employees, and when they're travelling or spending their own money on business expenses, they'd log in and enter each receipt as they got them and then submit a claim at the end of the month or whenever. There is a user role so that they don't see all your data in Xero and can just enter receipts if that is a concern. If your director has a user account with Xero they should enter their receipts and submit their claims, then you can do the authorisation and payment. For security purposes we don't encourage the sharing of login details. We're definitely planning on enhancing Expense Claims so you can enter on behalf of another user - please bear with us as we get through a large number of features and improvements.

Keep up the good work!

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Permalink Reply by Mark Essex on January 22, 2012 at 20:12

Hello Catherine, many thanks for your comprehensive reply, you have completley answered both of my questions and it is now much clearer to me. Keep up the good work and hopefully I wont be too much of a regular on these pages with questions...:) Mark

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Permalink Reply by Stephanie Rockell on May 15, 2012 at 23:28

While I can see the benefit in having each staff member set up with the user role for the use of Expense Claims, there doesn't appear to be a way for the claim to be submitted for approval without being coded. I wouldn't expect our staff members to trawl through the chart of accounts to find exactly what code they think they should be coding the receipt to (which half the time in my experience, ends up coded wrong). Is there the facility to recode it at the approval point if it is wrong?

I would much rather the option to name the expense claim - not just as another person, but just any reference, without my name on it as it's not my expense.

The way I would like to use the expense claims is enter every receipt the directors hand at me at the point of my receipt, be it use on either of their personal credit cards, personal eftpos, cash or other. Then create a claim when I get their personal credit card statements picking the receipts that match the statement transactions, and submitting/approving the claim for payment, this total being what the organisation pays to their personal credit card direct. Then at month end, those receipts left over (and not due to be on the next credit card statement) get made into a claim and "pay" it from the owners equity.

If my understanding is correct, this is already possible, but each time it'll come up with my name instead of "Amex" "Visa" "Mastercard" "Cash payments" which is what I'd prefer.

On a side by slightly related note, my company is still very paper centric and scanning everything that comes in would be double work while we still remain so focused on keeping the paper. Seeing one can upload a file relating to the receipt how about a tick box to indicate the receipt is available offline? For instance, I get most receipts that correspond to the credit card spend, but there are certain parking buildings that don't issue receipts (and for the small amount isn't a big worry). I think it would be handy to be able to easily see in Xero that there isn't a receipt for said transaction so I know not to spend an hour going to look for it.