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Expenses & Payments

Draft

Record and approve expenses, record payments, and understand partial and overpayment handling.

Goal

Explain how to create and manage expenses, record payments, and understand payment statuses including partial, full, and overpayment scenarios.

Who This Guide Is For

Accountants, bookkeepers, company owners, and anyone who records expenses or payments.

What You Can Do

  • Create and manage expense records
  • Submit expenses for approval
  • Approve expenses (if you have the permission)
  • Review pending and overdue AP approval steps from the Expenses approval queue
  • Review AP Team Queues to see which approver role, permission gate, or fallback expense approver group owns pending and overdue work
  • Review vendor bill AP matching and hold evidence from the vendor bill detail page
  • Receive topbar in-app alerts when your submitted expense/vendor bill/reimbursement is submitted, progressed, approved, or rejected. For employee reimbursements, the linked employee user can receive those updates too when the employee is connected to a user account.
  • Receive topbar in-app alerts when a new AP approval level is assigned to you
  • Receive topbar in-app alerts when an AP approval level assigned to your role becomes overdue
  • Receive escalation alerts when AP Controls routes still-overdue approvals to manager roles or all expense approvers
  • Act as a temporary AP approval delegate when your company has configured a delegation for you
  • Let finance admins opt into automatic AP delegation generation from approved HR leave
  • Record payments against invoices and expenses
  • View payment history
  • Understand payment statuses (partial, full, overpayment)
  • Allocate one payment across multiple invoices or vendor bills
  • Release one posted allocation line into reusable customer/vendor credit when the payment itself is correct
  • Record customer advances and vendor prepayments as reusable credits
  • Void payments if needed

What You Should Not Expect Yet

  • Attachment requirements, stronger approval-permission rules, named AP approval rules, multi-step approvals, assigned approver roles, approval due timers, and overdue escalation audiences can be configured in AP Controls by document type, amount threshold, expense account/category, required approval level, delay, and escalation role.
  • AP approval delegation can be configured from Settings -> Accounting -> AP Approval Delegations. Approved HR leave for employee-linked expense approvers can appear as a suggestion there, letting finance generate a temporary AP delegation without manually entering the dates. AP Controls can also enable automatic HR leave delegation so the scheduler creates safe route-to-delegate-only delegation windows inside the configured look-ahead period.
  • Live bank-feed support depends on configured provider credentials; manual payment recording and statement import remain available.

Step 1: Creating an Expense

  1. Go to Accounting → Expenses in the sidebar.
  2. Click Create Expense (or New Expense).
  3. Fill in the expense details:
    • Vendor — Select an existing vendor or enter a vendor name.
    • Description — A brief description of the expense.
    • Date — The date of the expense.
    • Reference Number — Optional reference (e.g., receipt number).
    • Items — Add line items with description, quantity, unit price, and tax rate.
    • Currency — The whole expense or vendor bill uses one currency. If you select a product, its saved cost can prefill the line after conversion into the document currency, but the unit price you save is still the vendor/expense price for that document.
    • Notes — Optional notes.
  4. Review the totals (subtotal, tax, and total amount).
  5. Click Save to create the expense as a draft.

Expense Statuses

| Status | What It Means | |--------|--------------| | Draft | The expense has been created but not yet submitted. It can be edited. | | Submitted | The expense has been submitted for approval. | | Approved | The expense has been approved. It is recorded in the general ledger. | | Paid | The expense has been fully paid. | | Cancelled | The expense has been cancelled. |

Step 2: Submitting and Approving Expenses

Submitting an Expense

  1. Open a draft expense.
  2. Change the status to Submitted (or click Submit).
  3. The system creates the first pending AP approval step from AP Controls / named approval rules.
  4. The assigned approver role, or all expense approvers when no role is assigned, receives an in-app notification in the topbar bell.
  5. The submitter receives a topbar confirmation notification.
  6. The expense appears in the AP Approval Queue while it waits for review.

Approving an Expense

  1. Go to the expense list and find expenses with Submitted status.
  2. Use the AP Approval Queue card when available to see pending or overdue approval levels first.
  3. Use AP Team Queues to see which team owns the backlog and open the next pending document for that team.
  4. Watch the notification bell for new approval requests and overdue approval alerts when your role is assigned to an approval level.
  5. Open the expense.
  6. Change the status to Approved (or click Approve).
  7. The system will:
    • Record the expense in the general ledger.
    • Update the expense status to Approved.
    • Block approval first if AP Controls require a receipt/document/media attachment for that document type, amount, or expense account/category and none is attached.
    • Block approval if AP Controls require an extra finance permission for that document type, amount, or expense account/category and your role does not have it.
    • Block approval if a named AP approval rule matches and requires an attachment or extra finance permission.
    • Block approval if the current approval level is assigned to a specific approver role and your company role does not match it.
    • Allow an active AP approval delegate to approve a role-owned level on behalf of the assigned approver when delegation is configured.
    • Advance approval progress instead of posting immediately when a named AP approval rule requires multiple levels.
    • Notify the submitter when approval progresses, completes, or is rejected.
    • Notify the next assigned approver immediately when a later approval level becomes active.
    • Refresh open expense/vendor bill/reimbursement detail pages through sockets and AP notification events so users do not need to reload the browser to see approval progress. If a socket event is missed, the page refreshes again when the browser tab is focused or becomes visible.
    • Show due or overdue state when the current approval level has a configured AP approval timer.

Vendor Bill Matching and Holds

  • Purchase receipt-created vendor bills show AP Matching & Hold on the detail page.
  • The panel shows matching status, variance, matched date, hold/release dates, matching notes, hold reason, scheduled payment notes, linked goods receipt, and linked purchase order.
  • A vendor bill on hold cannot be approved or paid until the hold is released by a user with expense approval permission.

Who Can Approve

  • Only users with expense approval permission can approve expenses.
  • This is typically an accountant, manager, or company owner.
  • Users with expense creation permission can submit their own draft expenses. Submitting another user's expense or changing non-submit statuses requires expense update permission.
  • If AP approval delegation is configured, the delegate also needs expense approval permission. The approval history records who clicked approve and who they approved on behalf of.
  • When an expense approver has approved HR leave, Settings -> Accounting -> AP Approval Delegations can suggest a delegation window using the leave dates. Finance can manually choose the delegate and generate the delegation, or AP Controls can enable automatic HR leave delegation so the system creates the same kind of route-to-delegate-only delegation when a safe delegate is available.

Step 3: Recording a Payment Against an Expense

  1. Open the expense from the expense list.
  2. Look for the Payments section or click Record Payment.
  3. Enter the payment details:
    • Amount — How much is being paid.
    • Method — Cash, bank transfer, credit card, etc.
    • Date — The payment date.
    • Reference — Optional reference number.
    • Notes — Optional notes.
  4. Save the payment.

What Happens When You Record a Payment

  • The payment is recorded against the expense.
  • If the total payments equal or exceed the expense total, the expense status changes to Paid.
  • A general ledger entry is created for the payment.

Step 4: Recording a Payment Against an Invoice

  1. Go to Accounting → Payments in the sidebar (or open the invoice and record payment from there).
  2. Click Record Payment (or New Payment).
  3. Enter the payment details:
    • Type — Choose "Receive" for customer payments.
    • Invoice or allocation rows — Select one invoice, or allocate the payment across multiple open customer invoices.
    • Amount — How much is being paid.
    • Method — Cash, bank transfer, credit card, etc.
    • Date — The payment date.
    • Reference — Optional reference number.
  4. Save the payment.

Posting the Payment

After creating a payment, it may need to be posted to create the general ledger entry:

  1. Go to Payments and find the payment.
  2. Click Post (if not automatically posted).
  3. The payment is now recorded in the general ledger.

Step 5: Understanding Payment Statuses

Partial Payment

When a payment is less than the full amount owed:

  • The invoice or expense remains in its current status (e.g., Sent for invoices, Approved for expenses).
  • The payment is recorded and visible in the payments list.
  • Additional payments can be applied until the total is reached.
  • One payment can be allocated across multiple same-customer invoices or multiple same-vendor bills when currency and party rules match.

Full Payment

When total payments equal the amount owed:

  • The invoice status changes to Paid.
  • The expense status changes to Paid.
  • No further payments are expected.

Overpayment

When total payments exceed the amount owed:

  • For linked customer invoices, the excess can create a reusable customer credit balance while retaining an [OVERPAYMENT] audit note.
  • The invoice or expense is marked as Paid.

Customer advances and vendor prepayments are recorded through dedicated payment actions and create reusable customer/vendor credits for later application.

Step 6: Viewing Payments

  1. Go to Accounting → Payments in the sidebar.
  2. Use What do you need to do? to quickly record a receipt/payment, prepare a vendor payment run, record a customer advance, or record a vendor prepayment.
  3. Use Payment History to see all payments with their type, amount, date, method, status, and reference.
  4. Click Review to see the allocation breakdown, legacy direct document link, reference, notes, and available actions.
  5. You can filter by date, type (Receive/Pay), method, or linked document.

Reallocating a Payment

Use Reallocate when the payment is correct but it was applied to the wrong invoice or vendor bill.

  1. Go to Accounting > Payments.
  2. Click Review on an allocated draft or posted payment.
  3. Click Reallocate.
  4. Replace the allocation rows with the correct invoice or vendor bill targets.
  5. Keep the allocation total equal to the original payment amount.
  6. Save with an optional reallocation note.

The system keeps the original payment record, voids the old allocation rows, creates replacement allocation rows, and recalculates the affected invoice or vendor bill status.

Releasing One Allocation to Credit

Use Release when one line on a posted multi-allocation payment should no longer settle that invoice or vendor bill, but the payment itself is still real.

  1. Go to Accounting > Payments.
  2. Click Review on a posted payment with more than one allocation.
  3. Click Release beside the allocation line.
  4. Enter a reason and confirm Release to Credit.

The system keeps the payment amount, releases that document settlement, creates reusable customer or vendor credit for the released amount, rebuilds the payment journal, and recalculates the affected invoice or vendor bill. If the payment is already matched to a bank statement line, unmatch it first.

When a payment is already bank-matched, the Review dialog shows a bank-match notice and an Open Statement link. If you have the required banking permission, use Unmatch, Release, Rematch to unmatch the bank line, release the allocation, and match the bank line back to the replacement payment journal in one controlled flow. If any guided step fails, the release dialog keeps an Allocation release exception panel showing the failed stage, whether the bank line was unmatched, whether the allocation was released, rollback status, and the related journal IDs. The same exception is saved to System > Audit Logs as payment_allocation_release_exception; use the Allocation Release Exceptions filter there to review or export those events later.

Viewing Payments for a Specific Invoice or Expense

  1. Open the invoice or expense.
  2. Look for the Payments section.
  3. You will see all payments applied to that document.

Step 7: Voiding a Payment

If a payment was recorded in error:

  1. Go to Payments and find the payment.
  2. Click Void (or Cancel).
  3. The system will:
    • Reverse the general ledger entry for the payment.
    • Mark the payment as Cancelled.
    • Re-evaluate the invoice or expense status based on remaining payments.

What Happens After Voiding

  • If an invoice was Paid and a payment is voided, the invoice may revert to Sent if remaining payments are below the total.
  • If an expense was Paid and a payment is voided, the expense may revert to Approved if remaining payments are below the total.

Known Limitations

  • Customer credits and vendor credits are implemented for the reviewed flows. Deeper deposit statements and richer credit reporting can still be expanded.
  • AP payment-run approval is implemented. Payment runs support multi-level approval, different-approver enforcement, high-value/variance/context escalation, and per-level extra permission routing. Expense attachment requirements, scoped extra approval-permission rules, named AP approval rule rows, multi-step expense approval levels, assigned approver roles, and approval due timers are configurable.
  • Receipt scanning (OCR) is available but may produce warnings or incomplete data. Always review scanned results before saving.
  • UNCERTAIN: The exact behavior of expense approval for expenses that affect inventory (e.g., goods receipts) may have additional steps not covered here.

How to Get Help or Troubleshoot

  • If an expense will not approve or stays submitted after approval, check that all required fields are filled in, that every required approval level is complete, that different-approver rules are satisfied, that any extra finance permission required by AP Controls or a named AP approval rule is assigned to the approver's role, that the approver is in the role assigned to the current approval level, and that required attachments are linked when AP Controls require them. An overdue approval timer is a warning, not a blocker.
  • If a payment does not update the invoice or expense status, check that the payment has been posted.
  • If you cannot see the Expenses or Payments module, check your role permissions. See Roles and Permissions.
  • For general questions, see the FAQ.
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