FreshBooks makes it easy to keep track of your spending. This article shows you how to add an Expense, as well as set up recurring Expenses and even re-categorizing them. Having your Expenses organized will help you keep track of where your money is going and make tax time a breeze.
You can create Expenses that you incur as part of your business operations (for example, Internet Expenses), or Recurring Expenses for those charges you incur on a frequent basis. You’re also able to create Expenses that you plan to rebill back to your Client (for example, supplies).
Create an ExpenseTo create an Expense, refer to the below steps:
- Head to the Expenses tab
- Click on the New Expense button
- Enter the total amount of the Expense (including tax) in the the Amount box
- If you have paid taxes on an Expense, click on the Taxes box. Choose the tax you paid on the item from the dropdown menu below. You’ll notice that FreshBooks automatically works out how much of the Expense total was tax
- Enter the Date of the Expense
- You can also add a Vendor if you would like to keep track of who your Expenses are being paid to
- Choose a Category. FreshBooks has tax-friendly categories, but feel free to add your own subcategory
- You can add Notes to your Expense if there is any additional info you want to include
- Click Add Expense to save
To create a Recurring Expense, the steps would be exactly the same as adding a new Expense, but you would check off the Recurring checkbox. Then you’ll see two additional fields appear, Frequency and Until.
- Frequency refers to how often this Expense occurs (for example, monthly rent).
- Until is useful if you’ll incur the Expense up until a certain date (for example, a 6 month phone contract).
In FreshBooks, we’ve organized the categories based on Expense tax categories to make it even easier for you to do your tax year end work. These categories are the ones commonly found on tax forms for claiming your business Expenses. However, you may find you need custom subcategories while getting your Expenses in order. You can create your own subcategory using the steps below:
- While creating a new Expense, click on the Category field to trigger the dropdown
- Select a parent category you want your Expense subcategory to go under
- Click on the Edit this list button at the bottom of the list
- Then click on the Add Subcategory link
- Type in your custom category and click the Save button
- Feel free to repeat as needed for other subcategories in other parent categories
- Once you’re done, hit the Done Editing button
- Click back on the main dropdown (to back out) and now you can type/select your custom subcategory from the main dropdown. It’s that easy!
What happens if I’ve received a reimbursement or refund on an Expense?
Since FreshBooks is a single-entry system, the Expenses tab can only track payments made from your account. Recording the reimbursement as an Expense would only have the system count the same Expense twice as payment again. You can either zero out/reduce the Expense amount after reimbursement, or delete the Expense entirely if it’s fully refunded. Steps are below:
- Click on the Expenses
- If the Expense has been refunded in full and you don’t want to track this in your account, check the box off and click on the Delete button
- Otherwise, if you want to keep track of the Expense after it’s been refunded, click edit next to the Expense
- Edit the Amount field to the new remaining amount that was paid after the refund, or zero it out for a full refund
- Click Save to finish.
The Expense will now display the correct amount after refund/reimbursement.