Money leaves a haulage business in small amounts, all day, from people who are nowhere near a desk: fuel, tolls, parking, an overnight, a set of gloves. Expenses is where that lands. Someone records what they spent, it is coded to a category and to whoever it was spent for, and it goes to the right person to approve. This is a how-to: follow the steps below to claim something, and to set the module up if you are the one doing that.
Before you start
Spend is a module, so it needs to be switched on for your company. If you do not see Spend in the sidebar, ask your administrator to enable it. Everybody who has the module can claim their own expenses and see their own history. Approving other people's, marking them paid, and editing the coding are separate permissions.
Step 1: Claim what you spent
Go to Spend, then Expenses, and click New expense. Enter:
- What you spent. The total on the receipt, including VAT. That is the number printed largest, so it is the one you are asked for. The net and the VAT are worked out and shown underneath as you type.
- When. The date on the receipt. A date in the future is refused, because it is almost always a mistyped year.
- What for. The category. Picking one sets the VAT treatment with it, so choosing Tolls switches to zero rated without you having to know that tolls are zero rated.
- Where. The merchant, so a duplicate can be spotted.
- On behalf of. The cost centre, if the money was spent for a particular vehicle, site, department or client. Optional, but it is what makes cost per vehicle and cost per job possible later.
Saving puts it in Draft. Nothing has been sent to anyone yet, so you can correct it or delete it.
Attaching the receipt
Choose Add a receipt and photograph it. On a phone this opens the camera straight away; on a computer it is an ordinary file picker. Photographs and PDFs both work, so a receipt that arrived by email can be attached as it is.
Do it while you are claiming rather than later. An expense with no receipt cannot be reclaimed against VAT, and if your company has set a limit above which a receipt is required, the claim will not be sent for approval without one.
Step 2: Send it for approval
Open the expense and click Send for approval. Two things are checked at that moment, rather than while you were still typing:
- A receipt, if your company requires one above a threshold. Without the receipt the VAT cannot be reclaimed, so the claim is held rather than passed on to whoever does the VAT return.
- The category limit, if the category has one.
If nothing in your company's policy needs a sign-off for that amount, the expense is approved there and then and tells you so. It does not sit in a queue nobody is watching.
Step 3: Approving other people's
Spend, then Approvals, lists what is waiting on you. Each row shows the amount, the date and what it was for:
- Approve releases it for payment.
- Query sends it back to the claimant with your reason, so they can fix it and resubmit. A reason is required, because "queried" on its own gives them nothing to act on.
- Reject ends it. Also requires a reason.
You will never see your own claim in your queue. Nobody approves their own spend, and that is not something a company can configure away.
Where a policy has several rungs, only the one the expense has actually reached appears. A second approver does not see it until the first has cleared it, so the same claim is never sitting in two people's queues at once.
Step 4: Set up your coding
Administrators get Coding under Setup. Two lists:
- Categories say what money was spent on. A sensible set for a haulage and warehousing business is created for you the first time the module is opened, covering fuel, tolls, maintenance, agency labour, packaging and the rest. Rename them, add your own, and set a per-claim limit where you want one.
- Cost centres say who it was spent for: a department, a site, a vehicle or a client.
Each category has an account code. It is left blank to begin with, because it belongs to your chart of accounts and guessing it would post real money to the wrong place. Filling it in is what will let a coded cost post itself to your accounts when that is switched on, so it is worth doing now. The page tells you how many categories still have none.
Step 5: Send an approved expense to Xero
Once an expense is approved, finance can post it to Xero as a bill. Open the expense and choose Post to Xero. It goes across as a draft bill against the supplier, or against whoever claimed it when it is a reimbursement, so the payment run is still approved in Xero by the people who normally approve it. Posting twice does not create a second bill.
The category’s account code decides where it lands.An expense whose category has no account code will not post, and says so rather than guessing. That is deliberate: a purchase posted to the sales account inflates your turnover and understates your costs at the same time, and it usually goes unnoticed until someone reconciles a VAT return. Set account codes on your categories in Spend settings before you start posting.
VAT is sent as the treatment on the expense, using the purchase rates rather than the sales ones, and the net and VAT figures go across exactly as claimed rather than being recalculated, so a bill never differs from the receipt by a penny of rounding.
Posting is limited to people with a finance or admin spend role, and company owners and admins. Being able to claim an expense does not let you put a bill in the company ledger.
What is coming
Photographing a receipt in the driver app, so a claim is made at the forecourt rather than from memory a week later. Then purchase orders and supplier bills, which use the same categories, cost centres and approval chain you set up here.
Related
- Transport invoicing, for money coming in rather than going out.
- Fleet and driver management, for the vehicles a fuel expense is attributed to.