Xero How To Allocate Expenses Claim To Loan Account

Quick Video: Xero has a very handy system for handling expenses claims for those expenses you pay in cash, from your personal account or credit card.

The expense claim feature confuses many because as the business owner they want to record the fact that they purchased some business items but don't necessarily want to be repaid those amounts immediately.

So how do we allocate expense items to loan account.

We have a Step by Step Procedure downloadable as a PDF available for download. Just click the link below.

 Download the Full Procedure as PDF

Transcription

Xero has a very handy system to handling expenses claims - for those expenses you pay in cash or from your personal account or credit card.

The expense claim feature confuses many because, as a business owner, they just want to record the fact that they have purchased some business items but don’t necessarily want to be repaid those amounts immediately.

So how do we allocate the expense claims to your loan account. First thing we have to do is to make sure you have a loan account there and it is set up properly and you will only have to do this once.

We go to ‘settings’, ‘chart of accounts’ then to liabilities and we will look for something similar to ‘owner A funds introduced’ - we are using a Demo company here and we just need to ensure that ‘enable to be paid’ is ticked – click save.

Let’s go set up an expense claim – go to ‘accounts’, ‘expense claims’ then we will add a receipt and we will say if is for Wilson Parking and today’s date - parking in the city - $60 and then we just click save and just click here.

There are a couple of steps you need to go through here because you have to think about the expense claims process being for a bigger organisation where you might have one person putting in their expense claim then someone has to approve both the claim and then the payment of the claim.

So we have one item for approval, and now we have basically one we of thinking about it is you have put forward your expense claim for someone to authorize.

We just click here and we can then approve a payment can be made here. We can authorize that – you can push it into another reporting period.

Now we do not have any expense claims waiting for authorization but we have an expense claim waiting for payment.

Click on the person – we have one item here and we are going to pay $50, today’s date and we are not going to pay it from a bank account but from ‘owner A funds introduced’ – the loan account.

Click ‘paid’ and that’s how you allocate expenses claim to the loan account.