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A really easy way to record and claim expenses in Xero

Xero is great – we are big fans of it here! But some bits are not quite as great as others, and the expense claims in Xero in particular have less greatness. They work but they are long winded, easy to get wrong and hard to fix if you do get it wrong. However the Xero app for iPhone/Android does have a neat feature where you can photograph a receipt and attach it to an expense claim all in one go so it is still tempting to use expense claims.

If you don’t need the create/submit/approve/authorise/pay workflow wrapped around expense claims then there is a better way. Really fast, really easy.

For any of our small business clients with a version of Xero that has invoicing (i.e. not the cashbook version you can only get through accountants) we recommend they use a accounts payable invoice (aka bill) to record expenses they pay for personally and then “pay” it from funds introduced as detailed in our FAQ here.

You can drive this all from your phone very easily, all you do is snap a photo of any receipt(s) you want to claim and email the photo to the unique “files” email address each Xero organisation has – set your Xero files address up as a contact on your phone first.

files

When the email arrives the attachment is automagically saved into an files inbox in Xero. Then when you have a bit of time and want to process your expenses you logon to Xero, go to the files inbox, tick all the photos of receipts sitting there and take the option to Add to new / Bill.

inbox

 

Complete the bill using the handy preview of each receipt on the left and making sure it is set to be tax inclusive.

bill

Then the last step is to approve it and pay it from Funds Introduced.

paid

I process my receipts every two months when I do the GST return, dating the bill and payment the last day of the GST period to make sure it is included in the return.

If you don’t have a version of Xero with invoicing then there is an option to create a spend money transaction instead of a bill – you would need to set up a dummy Petty Cash bank account in Xero and periodically clear it out by doing a receive money from Funds Introduced but it should still be pretty quick to do.