Keeping track of a business’s expenses sounds straightforward. However, in reality, it’s often anything but. Especially when it comes to expense claims. Many businesses consider any money spent as an expense, but for most accounting systems an expense is when someone spends their own money and then looks to be reimbursed for it. Again, this sounds pretty clear-cut, but take, for example, a salesperson on the road using a company credit card. What kind of expense is this? Xero has polished its Expenses software to be able to easily take care of these kinds of muddles, as well as much more. Let’s have a closer look and see what the Xero Expenses app can do…
What is Xero Expenses?
If you’re a long-standing Xero user, you might be familiar with Xero Expenses – or at least think you are! It is worth noting that there are two versions of Xero Expenses – the classic Expenses feature that used to be included in the Xero package and now also an improved, separate, Xero Expenses app with its own subscription ($4 per user per month). Long-term users will be happy to hear that if they had access to the classic Xero Expenses feature up until 1st July 2018, this will continue. As for newer customers who want to track expense claims, they’ll need to get a subscription for the new Xero Expenses app.
What does the new Xero Expenses app do?
The purpose of the new Xero Expenses app is to eliminate the paper chase that typically comes with expense claims while also making expense tracking easier. Last year, Xero made a big move and bought Hubdoc, one of the leading players in optical character recognition (OCR). This was fundamental in enabling Xero to offer a high-quality tool that can automate expense claims.
Optical character recognition (OCR) automates expense claims
OCR is used to fetch key information from uploaded documents, ultimately putting an end to time-consuming manual data entry. The practical application of OCR in Xero Expenses happens when users take a picture of their receipts. Xero scans the image for details and then automatically creates the claim. This not only greatly speeds up the expense claim process, but it also reduces the likelihood of errors.
Track your expenses with Xero
When it comes to expenses, real-time information is something all businesses can benefit from. It’s easy to lose track of important details while waiting for manual updates from various people and trying to keep on top of the back and forth of follow-ups. Now with the Expenses app, all the important details, such as the amount, the user’s status, the description, the expense account, the vendor and the date can be ascertained at a glance. Everything is in one place and, with Xero’s intelligent analytical capabilities, you can dig deep into your expenses and analyse users’ spending patterns.
Quick expense claim processing
Not only is submitting an expense claim as simple as snapping a picture, but approval happens in the same place. Users with the appropriate status and authority to approve/decline claims can go into the app, review the expense claim, and approve and reimburse there and then. Multi-line expense claims can also be submitted, which further streamlines the process.
Can the salesperson make an expense claim?
Returning to our hypothetical situation in which a salesperson is on the road using a company card to pay for expenses such as mileage and meals, is this considered an expense claim on the Xero Expenses apps? Well, that’s entirely up to you. Xero Expenses gives you the option to decide what is reimbursable based on what bank account the payment came from. Therefore, a company card could be included in this case.
What the team at Beyond think
The Xero Expenses app is a step in the right direction for Xero. Apart from successfully automating yet another aspect of accounting, the development of an Expenses app that is separate to the Xero accounting package is an advantage because it means that users won’t automatically have access to company accounts. Instead, expense claims can be kept entirely separate to this kind of sensitive information, which wasn’t the case with the original Xero Expenses feature. However, there is still room for improvement in the app. Currently, there isn’t a feature for accurately calculating mileage. Expensify, which is a slightly more expensive app, has a mileage calculator built into it. Xero Expenses doesn’t offer this – yet! Xero has been taking feedback onboard and say they are planning to update the app with a mileage tracking feature soon. So, all in all, we look forward to seeing the progression of Xero Expenses in the coming year.