How to Put Expenses in Xero: A Quick Guide

Managing your business expenses is crucial for accurate financial records and smooth operations. Xero, a popular online accounting software, offers an efficient system to help you keep track of your expenses.

In this article, we will guide you through the process of putting expenses into Xero, making expense management more accessible and efficient.

Firstly, we will cover the various user roles within Xero Expenses, which allows for different levels of access and control. Depending on your role, you may be a Submitter, Approver, or Admin, each with varying permissions for entering, editing, and managing expenses. This feature ensures that your employees can input their own claims, while managers or admins can approve, decline, and reimburse them effectively.

Next, we'll delve into the process of creating and recording expenses in Xero, whether it be materials, equipment, or mileage claims. By following the step-by-step instructions, you will be able to efficiently log your expenses, ensuring accurate financial reporting and a stronger understanding of your business's financial health.

Getting Started With Xero for Business Expenses

To start putting expenses in Xero, you will first need to set up your Xero account. Visit the Xero website, choose a pricing plan that includes Xero Expenses, and complete the registration process. Once you have a subscription, you can access the Xero app on your smartphone or through your web browser.

Start by familiarising yourself with the Xero dashboard. Here, you'll find an overview of your organisation's financial activity, including your income, expenses, and bank accounts. Familiarise yourself with the navigation options, as you will be using them frequently to input expenses.

When you're ready to track expenses, you can use the Xero Expenses feature, which streamlines the process of capturing receipts, submitting expense claims, and reimbursing your employees. To create an expense, follow these steps:

1. Open the Xero Expenses module from the main menu.
2. Click on the Add Expense button.
3. Enter an appropriate description for the expense, and select its category (e.g. travel, meals, or office supplies).
4. Input the date of the purchase and the total amount paid.
5. Attach a digital copy of the receipt, which can be a photo taken with your smartphone or a scanned image.

Keep in mind that the number of active users allowed to submit expenses within your organisation depends on your Xero subscription. Users are considered active if they submit a claim during the month, or if another user submits a claim on their behalf.

Now that you've learned how to input expenses in Xero, make it a habit to regularly update your records. This will help you maintain an accurate picture of your organisation's financial situation, making it easier to manage cash flow, control costs, and make informed decisions.

Remember, with consistent use and diligent tracking, Xero will become an indispensable financial tool for your organisation, helping you easily organise and monitor your expenses.

Tracking Business Expenses in Xero

Managing your business finances efficiently is crucial, and Xero offers a streamlined way to track business expenses. The Xero Expenses feature allows you to monitor company costs and reimburse personal money spent on the business by staff members.

To get started with Xero Expenses, you must first invite staff members to the system and assign them user roles. As a Submitter, a staff member can enter, edit, and submit their own claims. This makes it easy for you to organise reimbursements and keep an account of the expenses incurred by team members.

When logging expenses, such as materials, equipment, or tools, you can use Xero's tools to show that the expenses were incurred and paid for with personal funds. This feature, known as Funds Introduced, helps you maintain your records accurately and ensures timely reimbursements.

You can also set up tracking categories to gain insight into different areas of your business performance, such as departments or locations. While tracking categories are not explicitly designed for job costing, they can help you see how each part of your business contributes to overall costs and make proactive financial decisions.

Xero Go, the mobile app, allows you to create and view receipts and business expenses on the go, making it even simpler to manage your business expenses. With Xero Go, you can be confident in your ability to stay on top of expenses regardless of where you are or the device you're using.

In summary, Xero provides a comprehensive and user-friendly platform for tracking business expenses and ensuring that team members are reimbursed for any personal funds spent on the company. By using Xero's features and tools, you can maintain accurate financial records and make informed decisions about your business's financial health.

Using the Xero Expenses App

App Accessibility

The Xero Expenses App is available for both submitters and approvers. Employees can use the web version, Xero Me or the Xero Expenses mobile app to submit expense claims, while approvers and admin users can submit and approve claims through the Xero Expenses web version or the mobile app. Xero Me, however, cannot be used by approvers.

Inputting Expenses into the App

To input expenses into the Xero Expenses App, follow these simple steps:

1. Capture receipts: Take a photo of your receipts using the app. This will make your expense claims fast and paperless, making it easier for you and your company to track and manage expenses.
2. Submit expense claims: Enter the details of your expense, such as date, amount, and category, and submit the claim for approval.
3. Reimburse expenses quickly: As an approver, you can review and approve expense claims without delay, ensuring employees are reimbursed promptly.
4. Monitor employee spending: Use the app's analytics feature to gain insights into your team's expenses and manage them efficiently.
5. Manage expenses on the go: Whether you need to claim expenses or track mileage, the Xero Expenses App allows you to do it all from your mobile device.

The Xero Expenses App is a convenient and efficient tool for managing your expenses, making it easy for employees to submit, approve, and reimburse costs while keeping track of company spending.

Managing Reimbursements in Xero

Understanding Xero's Reimburse Function

Xero's reimburse function is designed to help you manage employee expense claims efficiently. This feature allows your staff to be reimbursed for personal money spent on behalf of the business, while also enabling you to track and monitor these expenses. By using Xero's reimbursement tools, you can better manage funds in and out of your business, ensuring accurate accounting and financial health.

Employee Reimbursement Process

The employee reimbursement process in Xero can be broken down into a few simple steps:

1. Submit the claim: Employees create and submit expense claims or mileage claims within Xero for any personal funds spent on the business, including daily allowances and work-related travel expenses.
2. Approve the claim: Once an expense or mileage claim is submitted by the employee, it needs to be reviewed and approved by the appropriate person in your organisation, such as a manager or accountant.
3. Reimburse the employee: After the claim has been approved, you should set up Xero Expenses and create an expense suspense account in the chart of accounts to clear reimbursements. Next, create reimbursement pay items and mark expenses as paid through the suspense account.
4. Add reimbursement to payroll: To reimburse the employee, add the reimbursement amount to a draft pay run within Xero Payroll. This will ensure that the reimbursement is correctly implemented and accounted for in your financial records.
5. Process and reconcile payroll: Finally, process the pay run and reconcile payroll to complete the reimbursement process. This will ensure that all the necessary financial records are in order and up-to-date.

By following these steps, you can effectively manage reimbursements in Xero and maintain a clear, accurate picture of your business's financial position.

Leveraging the Xero Me Mobile App

The Xero Me mobile app is a powerful tool that allows employees to efficiently manage their expenses and submit claims while on the go. With this app, you can easily capture receipts, submit expense claims, and track the status of your claims.

Submitting expenses in the app is simple. To begin, open the Xero Me app on your iOS or Android device. Make sure you have the necessary permissions, such as 'submitter' access, to perform these tasks. Then, follow these steps to create an expense claim:

1. Navigate to the Expenses section in the app.
2. Tap on the '+' icon to create a new expense claim.
3. Enter the required details, such as the date, amount, and vendor.
4. Attach a photo of the receipt or invoice.
5. Add notes or additional information if necessary.
6. Review your submitted information and save the expense claim.

Once saved, your expense claim will be sent to the designated approvers for review.

The Xero Me app also gives you the ability to view and edit your expense claims. This feature allows employees to keep track of claim statuses and make any necessary updates. Follow these steps to access and edit your claims:

1. Access the Expenses section of the app.
2. Locate the desired expense claim.
3. Tap on the claim to view the details.
4. Make any required updates and save the changes.

As an employee, leveraging the Xero Me mobile app ensures you stay on top of your business expenses, making reimbursements and claim tracking more straightforward and efficient. Download Xero Me to manage your expenses with ease and convenience on your mobile device.

Accounting Principles in Xero

Xero is a powerful software that helps you manage your organisation's finances, applying key accounting principles for accuracy and compliance. In this section, we'll discuss how Xero applies these principles when handling expenses.

To begin with, Xero allows you to record and categorise your business expenses more efficiently. By maintaining accurate records of expenses, you can ensure proper financial reporting and tax compliance. The platform lets you input these costs in various ways, such as manually entering an expense or uploading a receipt through the Xero Go mobile app. Additionally, you can also connect your bank account to Xero for seamless import and categorisation of transactions.

Partnering with the double-entry bookkeeping system, Xero records both sides of every financial transaction for an accurate view of your business's financial position. For example, when you record an expense paid with personal funds, Xero will decrease your business liability account (Funds Introduced) and increase the relevant expense account.

In Xero, expense accounts are tailored to meet your business needs, allowing for detailed classifications like rent, office supplies, travel, and more. Proper categorisation helps you monitor and control costs while generating insightful financial reports for your organisation.

To maintain your organisation's financial integrity, it's essential to apply the accrual accounting principle in Xero. This means recording transactions in the period they occur, regardless of payment timing. For example, if you receive an invoice in August but pay it in September, Xero should still record the expense in August. This method provides a more accurate picture of your financial results and obligations.

Lastly, to comply with the matching principle, Xero's software enables you to link expenses to specific revenue streams or projects. By doing so, you can correctly match these costs to the income they generate, thereby assessing your business profitability more accurately.

By adhering to these accounting principles, Xero helps you manage your business finances with greater precision and clarity. So, whether you're processing expense claims for reimbursement or tracking expenses for tax purposes, Xero has you covered.

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