8 min read

Expenses

Track all costs related to a project or your business

Overview

Expenses allow you to track costs for a Project as well as your overall business. Expenses work in a similar way to Invoices and Quotes. Expenses have specific states relevant to them.

Expenses can be used as Purchase Orders if your business works this way. So if and when you send an Expense as a PDF to a supplier it will appear as a Purchase Order.

Everyone and every system has their own taxonomy for Expenses. Purchase Orders, Orders, Costs, etcbut as they say “a spade is a spade under any other name’. It simply semantics. An Expense is just what it sounds like.

What are Expenses?

Expenses are things that cost your business money. These costs might be general business expenses, such as office rent, or they might be costs that are specific to a Project, such as contractor fees, purchasing materials for a project or any other cost that is incurred during the course of completing a project. Either way anything that costs the business money is considered an Expense.

Expenses, like Invoices, are created under a Project. This is why we suggest running a general admin Project that correlates to your tax reporting period as this gives you the ability to monitor and track general business expenses in the same what that you would any other Project. You can think of it like treating your business as a Project.

You might also think about having internal Projects where you can also specifically monitor costs. Moving Office Project, hiring a new employee project. All these things could and should be considered projects in their own right and by thinking in this way you will form the habit and discipline of accounting for and tracking everything in your business and not just your clients projects.

You can also track time that this spent on general business activities in order to get a better picture as to what time is spent on non income generating activities.

All financial documents: Invoice, Quotes and Expenses, are colour coded so that you can see immediately what type of document you are working on.

Expenses are RED so there is not mistaking what type of document you are working on.

Expenses States…how do they work?

Expenses have the states shown above. Each state determines:

  1. What can and cannot be edited or updated
  2. When the Expense impacts your accounts
  3. When Payments can be made

Let’s look at each state…

Expenses start in a Draft state which means:

  1. You can update and change anything on the Document without impacting your accounts.
  2. You cannot apply a payment.
  3. The transactions do not appear on any reports. In other words, your accounting ledger is not affected.
  4. You cannot send an Expense (such as in the case of using it like a Purchase Order) or download a PDF although you can preview it.
  5. You cannot schedule it.

Expenses then move to a Finalised state which means:

  1. The Expense gets assigned and ID number which can be changed if needed.
  2. A Payment can be applied.
  3. If you are using the Accrual Accounting Method then the transactions will appear on your reports. In other words, your accounting ledger is affected.
  4. You can send an Expense (such as in the case of using it like a Purchase Order)
  5. You can download a PDF
  6. You can schedule it.

Note that before you can Finalise an Expense the User is required to manually select the Company the Expense is for. This is unlike an Invoice which gets automatically assigned the company based on the company the Project is under. Obviously the Expense could be for any number of random Companies and it is not therefore possible to automatically assign this when the Expense is first created.

If you wish to send Purchase Orders to suppliers (which is a sensible business practice as it confirms what both parties are expecting) then you can send an Expense via the Beeswax system and it will present as a Purchase Order.

If you do send an Expense then the state will change to Sent, which means:

  1. You can continue to edit the Expense
  2. A Payment can be applied.
  3. You can download a PDF
  4. You can schedule it.

When a payment is made against the Expense the state will show one of the following:

  1. Part Paid or
  2. Paid:

This is pretty self explanatory. Sometimes an expense may not be paid in full in which case you will see the Part Paid state.

There could be several Payments made to an Expense over time and only when it is paid in full will it move to the following state of Paid.

The Expense will move to the Paid state when it is fully paid. That is when the total payments equals the total amount of the Expense.

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