Expense Types
Expense types categorize the different kinds of business expenses employees can claim for reimbursement. This guide covers creating and managing expense categories and approval workflows.
Expense Types Overview
Navigate to Expense Types (or Settings > Expense Types) to manage expense categories.
Why Categorize Expenses
- Budgeting: Track spending by category
- Compliance: Ensure policy adherence
- Reporting: Analyze expense patterns
- Approval: Route to appropriate approvers
- Accounting: Map to correct GL accounts
Default Expense Types
Common expense types in organizations:
| Expense Type | Description | Requires Receipt |
|---|---|---|
| Travel | Transportation costs | Yes |
| Accommodation | Hotel and lodging | Yes |
| Meals | Business meals and food | Yes (above limit) |
| Office Supplies | Stationery, equipment | Yes |
| Communication | Phone, internet charges | Yes |
| Training | Courses, certifications | Yes |
| Entertainment | Client entertainment | Yes |
| Mileage | Vehicle reimbursement | No (calculated) |
| Miscellaneous | Other business expenses | Yes |
Creating Expense Types
Add a New Expense Type
- Navigate to Expense Types > Add New
- Configure the expense type settings
- Click Save
Expense Type Fields
| Field | Description | Required |
|---|---|---|
| Expense Name | Category name | Yes |
| Expense Code | Short identifier | No |
| Description | Explanation of what's covered | No |
| Status | Active or Inactive | Yes |
Limit Configuration
| Setting | Description |
|---|---|
| Maximum Amount | Per-expense limit |
| Daily Limit | Maximum claimable per day |
| Monthly Limit | Maximum claimable per month |
| Requires Approval Above | Threshold for additional approval |
Receipt Requirements
| Setting | Options |
|---|---|
| Receipt Required | Always, Above threshold, Never |
| Receipt Threshold | Amount above which receipt is mandatory |
| Multiple Receipts | Allow splitting across receipts |
Example Configuration: Travel Expenses
Expense Type: Travel - Air
Code: TRV-AIR
Description: Airfare for business travel
Maximum Amount: $2,000
Receipt Required: Always
Advance Booking: Required (7 days)
Approval: Manager + Finance (above $500)
GL Account: 6100-Travel
Expense Categories
Organizing Expense Types
Group related expense types into categories:
| Category | Expense Types |
|---|---|
| Travel & Transport | Airfare, Train, Taxi, Mileage, Parking |
| Accommodation | Hotel, Serviced Apartment |
| Meals & Entertainment | Meals, Client Entertainment |
| Office | Supplies, Equipment, Software |
| Communication | Phone, Internet, Postage |
| Professional | Training, Subscriptions, Memberships |
Category Benefits
- Simplified reporting by expense group
- Consolidated budget tracking
- Easier policy management
- Cleaner expense forms
Expense Approval Workflows
Default Workflow
Standard expense approval process:
- Submit: Employee submits expense claim
- Manager Review: Direct manager reviews
- Finance Review: Finance team validates (optional)
- Approval: Expense is approved
- Reimbursement: Payment is processed
Workflow Stages
Employee Submit → Manager Approve → Finance Verify → Payment Processed
↓
Reject → Back to Employee
Multi-Level Approval
Configure approval levels based on amount:
| Amount Range | Approval Required |
|---|---|
| Up to $100 | Auto-approved |
| $101 - $500 | Manager only |
| $501 - $2,000 | Manager + Finance |
| Above $2,000 | Manager + Finance + Director |
Setting Up Approval Workflow
- Navigate to Settings > Expense Workflow
- Define approval levels
- Set amount thresholds
- Assign approvers by level
- Save configuration
Approval Routing
| Routing Type | Description |
|---|---|
| Reporting Manager | Goes to direct supervisor |
| Department Head | Goes to department lead |
| Finance Team | Designated finance approvers |
| Role-Based | Based on approver's role |
| Amount-Based | Different approvers by amount |
Expense Policies
Policy Settings
Configure rules for each expense type:
| Policy | Description |
|---|---|
| Documentation | Required supporting documents |
| Advance Notice | Days in advance for pre-approval |
| Frequency | Limits on claim frequency |
| Validity Period | Time window for submission |
Example Policies
Meal Expenses:
Daily Limit: $50
Per Meal Limits:
- Breakfast: $15
- Lunch: $20
- Dinner: $30
Receipt Required: Above $25
Tips: Maximum 15%
Mileage Reimbursement:
Rate: $0.655 per mile
Maximum Daily: 100 miles
Documentation: Trip log required
Approval: Auto-calculated, manager approval
Per Diem Configuration
Setting Up Per Diem
For travel expenses, configure daily allowances:
- Navigate to Expense Types > Per Diem Settings
- Set daily rates by location/region
- Configure meal breakdown
- Enable location-based rates if needed
Per Diem Rates
| Location Type | Daily Rate |
|---|---|
| Domestic | $75 |
| Metro Cities | $100 |
| International - Tier 1 | $150 |
| International - Tier 2 | $120 |
Per Diem Components
| Component | Percentage |
|---|---|
| Accommodation | 50% |
| Meals | 35% |
| Incidentals | 15% |
Expense Type Restrictions
Visibility Controls
| Setting | Description |
|---|---|
| Departments | Available to specific departments only |
| Roles | Available to certain roles |
| Employment Type | Full-time, Part-time, Contract |
| Locations | Geographic restrictions |
Example Restrictions
Client Entertainment:
Available To: Sales, Account Management
Roles: Manager and above
Approval: Always requires Finance approval
Limit: $500 per event
Documentation: Guest list required
Expense Reporting
Reports by Expense Type
- Expense Summary: Total by category
- Trend Analysis: Month-over-month comparison
- Top Expenses: Highest spending categories
- Policy Compliance: Violations by type
Budget Tracking
Track expenses against budgets:
- Set annual budget per expense type
- Monitor spending throughout the year
- Receive alerts when approaching limits
- Generate variance reports
Example Report: Monthly Expense Summary
| Expense Type | Budget | Spent | Remaining | % Used |
|---|---|---|---|---|
| Travel | $10,000 | $7,500 | $2,500 | 75% |
| Meals | $3,000 | $2,800 | $200 | 93% |
| Office Supplies | $1,000 | $450 | $550 | 45% |
Accounting Integration
GL Account Mapping
Link expense types to general ledger accounts:
| Expense Type | GL Account | Department |
|---|---|---|
| Travel - Air | 6100 | By employee |
| Meals | 6200 | By employee |
| Office Supplies | 6300 | By employee |
Export for Accounting
- Navigate to Expenses > Export
- Select date range
- Choose format (CSV, Excel, Journal Entry)
- Export for import into accounting system
Best Practices
Category Design
- Keep categories clear and distinct
- Avoid overlapping expense types
- Align with accounting requirements
- Consider reporting needs
Policy Configuration
- Set reasonable limits
- Balance control with employee trust
- Document policies clearly
- Review and update periodically
Workflow Efficiency
- Minimize approval bottlenecks
- Use auto-approval for small amounts
- Set reasonable review timeframes
- Enable mobile approval for managers
Compliance
- Require receipts appropriately
- Maintain audit trail
- Regular policy reviews
- Train employees on expense policies
Next: Learn about Roles & Permissions to configure access control.