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Expense Reports FAQs
Summary: Answers to frequently-asked questions about tracking expenses in Clients & Profits X. Clients & Profits can efficiently track expenses, e.g., mileage, meals, and postage; charge appropriate job tickets for expenses; and if necessary, reconcile with an employee advance check.
Q. How should expense reports be used?
Expense reports are added by employees to track incidental out-of-pocket job costs such as parking, mileage, phone calls, meals, etc. They can be reconciled with an employee’s advance check or reimbursed after the employee paid these expenses with their own funds. Refer to the online user guide for how to reimburse an expense report. Note: Employee advance checks are not available in Studio.
Q. How are expense reports different from Accounts Payable invoices?
Expense Reports only directly impact the job's costs, not the general ledger like a job cost A/P invoice. However, the general ledger is impacted when the expense report is reimbursed.
Q. How does reimbursing an expense report affect the General Ledger?
This depends on how the expense report is reimbursed. One way is to automatically create an overhead A/P invoice for the exployee's out-of-pocket expenses. This invoice will debit the job cost accounts on the tasks to which the expenses were applied (Note: Studio users must manually create this overhead A/P invoice or job cost check). See the online user guide for how to create the overhead A/P invoice automatically via the Expense Reimbursement window. Or, if the employee was issued an employee advance check for the expenses, when the expense report is reconciled with the advance check (via the Expense Reimbursemnt window), upon saving/posting the reimbursement window, amounts are moved out of the pre-paid expense asset account (originally debited on the employee advance check) and into the actual job cost accounts on the tasks. This journal entry will have an EXP# prefix.
Q. What is the difference between choosing My > My Expense Reports or Accounting > Expense Reports?
Both are areas through which you add expenses. My Expense Report is where you enter expenses only for yourself and review or print them for a specific date. To add, find, or print expense reports for all staff members, choose Accounting > Expense Reports. This is also the area where expenses are approved, reimbursed, and reconciled with employee advance checks.
Q. What should I enter in an expense’s category?
An expense's category is user-defined, so it can contain any meaningful explanation of an expense. (a lookup list is not associated with the category). It appears on job cost reports in the "Who" column, the same place that the staff initials or vendor ID appear for other costs. There are expense reports that sort by category, so be consistent with descriptions and remember that a category is case-sensitive as well.
Q. What determines the cost and billable (gross) amounts of an expense?
You determine a cost amount as you add an expense. If the task you use has a markup, then the cost amount is marked up to produce a billable (gross) amount. If the task you use has no markup, then the cost amount is also entered for the billable amount. If the task you use is unbillable, then the cost amount is the only amount for the expense and it will not have a billable amount.
Q. Should I use expense reports to record client-related cellular phone charges even if I won't bill these to a client?
Yes and no. Yes, if they are out-of-pocket cell phone charges for which the agency will reimburse you. The costs are job related and affect its profitability, so they should be entered as an expense report in this situation. No, if you are using a company cell phone, in that case, enter an Internal Charge, which are used to record the agency's overhead expenses (like a cell phone bill on the company's account) that are costed back to a client's job on a per unit basis (per minute in this case). If you don’t bill these costs, then add them to an unbillable task. The cost is recorded against the job, but it won't be appear as billable (it won't have a gross amount).
Q. Should I use expense reports to record in-house charges, like postage, that don't fit into the "per unit" model used for internal charges?
Yes. Even though such expenses will not be reimbursed because they were already paid for as an overhead cost to the company, this is where they should be entered. It's much like entering time, where salaries are an overhead cost to the company, but the hours, net, and gross costs are put on the job tickets through time cards and time sheets. In-house charges to a client are already paid for as an overhead cost (like the postage on a postage meter), but are charged back to the client through expense reports.
Q. How do I print a report with all the expenses of a certain type, like postage?
Choose Accounting > Expense Reports. Choose File > Print Expense Reports, or click the Print Reports toolbar button. To print a report by a specific category of expenses, such as postage, type the category in the "and for what" area.
Q. How do I approve expense reports?
Choose Accounting > Expense Reports. Find an expense report for a certain staff member on a certain day . Choose Edit > Approve Selected Expenses or click the blue link "approve the selected expenses". This will approve all the costs on the report. The expenses won't appear on a job until they are approved (it's similar to posting).
Q. Who can approve expense reports?
Expense reports must be approved by a Clients & Profits user with the access privilege to approve them. To give a user access to approve expenses, choose Setup > Users: Permissions. Select a user. In the General window set the "Expense reports for:" to "Anyone" or their department. Then click on the "Accounting/Finance" tab. Under "User can add expense reports" choose "only for themselves" or "For any one".
Q. Can an employee advance check be applied to expense reports added on different days?
No. An employee advance check can only be reconciled, via the Expense Reimbursement window, with a single day’s expenses.
Q. Can unapproved expenses be reconciled with employee advance checks?
No. Only approved expenses can be reconciled with employee advance checks. (Employee advance checks are not available in Studio.)
Q. What happens if an employee owes money to the company when an advance check is reconciled with their expense report?
The employee has to provide a personal check for the balance of what is owed. That check number is entered during the reconciliation process. See the online user guide for more information on how to do this.
Q. What happens if an employee is owed money by the company when an advance check is reconciled with their expense report?
The employee is automatically reimbursed if owed money. A company check for the amount owed is added and posted. After the advance check is reconciled with the expense report, choose Accounting > Checkbook. There you’ll find a check which you can immediately print and give to the employee. See the online user guide for more information on how to do this.
Q. How do expense reports differ from internal charges?
Internal charges are used to bill overhead costs back to the client via the job ticket for items on a per unit basis (copies for a leased or owned copy machine, faxes, binders, etc.) where a table can be created for the net cost and billable (gross) amount for each item. Though expense reports also can bill back overhead costs that don't follow a "per unit" framework, they are typically used for employee costs paid with their own funds either out-of-pocket or after receiving an employee advance check. Refer to the Internal Charges online user guide page for more information.
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