Expensify, Receipts, and Expense Reports (with Xero)

If you’re a company with more than one officer, partner, or employee you might benefit from using Expensify.  I have a handful of my clients using this, as well as I use it for my Xero-based accounting practice.

The first thing you want to decide is which Expensify plan you should use:

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For Xero, you’re best choosing the Team membership; for now the corporate plan works best with other integrations.

Have a quick read on the instructions for its integrations here: http://help.expensify.com/xero/

The idea, if you haven’t figured it out yet, is that you’ll

a) run your bank and CC feeds through Expensify

b) match up receipts to those transactions 

c) make reports to sync into Xero

This means if you purchase a few meals to impress a client, put some fuel in your car on the way there, and pay for some parking – it can be assigned in Xero to that accounting category AND even the client (by tracking).

But ONLY items marked reimbursed will transfer over to Xero.

Read that again:  You have options in Expensify to mark them as billable and/or reimbursable. Only those marked reimbursable will sync.  The idea being if you use your personal account, you ask your company to reimburse you (and you can even get reimbursed through Expensify upon a certain set-up).

But what if you’re a legit and bonafide company with company credit cards?  You’re then  not owed the money, but you want those expenses to show up in the books? They won’t if they aren’t marked reimbursable.

At this point you’re probably scratching your head.

Workaround aka “Xero-hack”:

Fact: The bank account in Xero will pay this company card, so you won’t want to reimburse someone for using it.

1.     Make a credit card account, but don’t set up the feed. You will “pay” this account when the bank pays the card.

2.     To pay the credit card, make a “transfer” to it.

3.     In Expensify: always make two separate reports: one for the company card (and I recommend to title it such) and one for the items you paid for out of pocket

4.     The expense reports (remember, mark those items as reimbursable) will go into Xero as a bill.

5.     The legitimate one that gets reimbursed to the person who fronted the expenses will match when you cut them a check or reimburse them through Expensify. 

6.     Manually pay the company card bill (in the bill screen itself) by the faux-credit card account.

I also recommend taking the accounts off the dashboard, as the balances will not balance, but if you look in the COA, you’ll see correct balances. In theory, if the charges and the payments equal out, the balance will zero out.

Hope this helps! Happy expensing!