Welcome to the Fit Small Business Xero training course! In this lesson, we’re going to cover how to create and manage expense claims in Xero.

You can follow along on your own Xero account. If you don’t have one already, click here to sign up for a free 30-day trial and follow along below.

To complete this lesson, you can either watch the video below, read through the step-by-step instructions, or do both. Let’s begin!

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What Is the Importance of Creating and Managing Expense Claims?

If an employee or business owner spends personal funds to purchase items for their business, they must complete an expense claim to be reimbursed. Expense claims are similar to expense reports in that you can submit multiple receipts on one expense claim.

Example: If you attended a conference and you used your personal credit card to pay for airfare, rental car and hotel, you can submit receipts for all of these items on one expense claim to request reimbursement.

While traditionally expense claims would be submitted by paper and processed by hand, Xero lets you create reports within the software and attach receipts digitally. Then, Xero handles all the accounting for you!

How Do I Create an Expense Claim?

To create an expense claim, follow the steps below:

Step 1 – Navigate to Expense Claims

From the Accounts menu, select Expense Claims as indicated in the screenshot below.

Step 2 – Click the “Add Receipt” button as indicated in the screenshot below.

Create an Expense Claim in Xero.

Step 3 – Complete the fields indicated in the screenshot below. A brief description has also been provided.

Create an Expense Claim in Xero.

  1. Receipt from – Enter the name of the company as it appears on your receipt.
  2. Date – Enter the date on the receipt.
  3. Reference – This field is optional. You may include any additional info in this field regarding this purchase.
  4. Description – Enter the business purpose for this expense in this field.
  5. Quantity – If you purchased items you can enter the quantity purchased here.
  6. Unit Price – Enter the unit cost or total amount of the purchase in this field.
  7. Account – From the dropdown, select the account the purchase should be categorized to. Note: If an account has not been flagged to “show in expense claims” it will not show up in the dropdown.To make this change, go to the chart of accounts and add the flag to the account.
  8. Tax Rate – From the dropdown, select the appropriate tax rate or leave the default rate as shown here (Tax on Purchases (0%).
  9. Tracking category (Region) – If you use tracking categories, select the appropriate category from the dropdown.
  10. Attach file – You can attach copies of receipts and other supporting documentation here.
  11. Add a new line – If you need to add additional line items, just click the “add a new line” button to do so.
  12. Save and Add Another Receipt – Select this option if you have multiple receipts that you need to enter. Note: The expenses do not have to be related for you to select this option. In the next step we will show you how to submit receipts for approval.
  13. Save – Once you have completed all of the fields, you can save. You can also save even if you have not completed all of the fields. Xero will not allow you to submit a receipt for reimbursement until all fields have been completed.

Step 4 – All receipts that you have added will appear in the next screen as indicated below.

Create an Expense Claim in Xero.

Receipts that have not been submitted for approval will appear on the Current Claim tab as indicated above. The total number of receipts along with the total amount will appear as indicated in the above screenshot.

Step 5 – Select the receipts to submit for approval by putting a checkmark in the box & click the “Submit for Approval” button as indicated below.

Submit an Expense Claim for approval in Xero.

Note: As mentioned previously, you can submit one receipt per claim or multiple receipts as we have done in this example.

Step 6 – In the next screen, you can see the status of all expense claims that you have submitted.

Status page for expense claims in Xero.

All expense claims that have been submitted but not authorized for payment will appear in the “Awaiting Authorization” tab as indicated in the screenshot above. Once the expense claim has been approved, it will move over to the “Awaiting Payment” tab.