Expenses

In the Composity Expenses module, you can manage all types of business-related expenses, including recurring costs like rent and utilities, as well as one-time expenditures such as salaries and material purchases. When creating a new expense, the module provides a default form with all the necessary fields to ensure accurate data entry. These fields can include:
 

Document details

• Customer: Select the customer associated with the expense. If the vendor is not listed, you can add a new one by clicking on “New account” and a new form will pop up allowing you to add billing data information. After selecting or adding the customer Company ID, VAT, Address and Responsible person information will be displayed.
• Location: You can opt to add a specific location, such as a branch or warehouse, associated with the expense.

Item Details

In the Item section of the expense form, you can specify the details of each item or service being recorded. Select the specific item from your inventory or add a new one if it’s not listed. You can also import items from an existing list to add as many as you want. In the Category section, you can specify the category to which the expense belongs.

Note: Categories can be added by navigating to Expense‣Settings‣ Expense Categories. Click on Open, and from there, you can create and manage multiple categories for recording expenses.

Adding Distributable Costs

The Add distributable cost button, located below the lines of the expense document, allows you to allocate additional costs such as transport, duty, and eco-tax across the items listed in the document. Here's how it works:

• Add Existing Expense: You can select from previously saved expense documents.
• Add Additional Expenses: Enter new amounts to be distributed across the items.

In the Distribute Type drop-down menu, you can choose how the costs are distributed:

• By Quantity: Costs are allocated based on the quantity of each item.
• By Amount: Costs are distributed based on the monetary value of each item.
• By Weight: Costs are allocated according to the weight of each item.
• By Volume: Costs are distributed based on the volume
  of each item.

If the cost is marked as Is it external?, it will be included in the calculation of the item's duty.

Calculating Duty and Eco Taxes  

• Duty Amount: Calculated as the sum of the item's converted price plus all allocated external costs.  
• Eco Tax Net Amount: Calculated by multiplying the net weight by the percentage entered in Eco Tax Net.  
• Eco Tax Packaging Amount: Calculated by applying tax on different materials used for item packaging.  

Receipt Issuance and Currency Handling  

When you finalize the expense and check the Issue Receipt box, Composity will automatically generate an inventory receipt.  

Note: When entering a price in a currency other than the default to the working environment, the converted price will be recorded in the inventory receipt.  
Purchase receipts issued by expense do not allow direct editing. They can be edited from the expense document. This avoids the difference between the quantities and the recalculated values of the entered items, compared to the expense document and the purchase receipt.  

Expense Profile  

After adding a new expense, you can easily manage all its related details within the Expense Profile. To view or modify the account profile details, simply click on the eye icon to log in to the specified account profile. You can access the expense template in PDF format and other relevant information in the Expense Profile.  

Note: You have the option to edit the expense template to meet specific business needs. To do this, go to Administration‣Documents‣Templates‣Expense. Here, you can modify existing templates or create new ones. 

Payments: Track all payments made towards the expense. You can add or edit payment records as needed to ensure accurate tracking.  

Inventory Receipts:Inventory receipts are issued when adding a new expense. These receipts record the details of items or services received. You can download and manage these receipts directly from the expense profile.  

Expense Lines: This section lists all items or services included in the expense. You can view the Item Name, Description, Quantity, and Amount for each entry.  

Ledger Entry: Tracks the financial impact of the expense in your general ledger. This is crucial for accurate accounting and auditing.  

Expense Distribution: Allows you to allocate the expense across different departments, projects, or accounts, ensuring that costs are accurately distributed.  

Documents: You can upload, download, and manage any documents related to the expense, such as invoices, contracts, or receipts.  

Reversing an Expense  

To reverse an expense, navigate to the table of expense documents and locate the specific expense you wish to reverse. Click on the three dots (options menu) next to the expense line, then select the ‘Reverse' option.  

Upon selecting this option, a reversal document will be automatically generated. This document mirrors the original expense data but with reversed values—positive quantities from the original document will appear as negative in the reversal document. You can adjust the values in the generated reversal document if necessary before saving it. 

Setting up Expense Forms  

To adjust expense forms in Composity for your specific business needs, go to Setting‣Form types‣ Expense. You can include or exclude the following fields:  

Contact: The contact field records the individual responsible for the expense. This is particularly useful for approval workflows or for following up on specific expenditures.  

Project: If your expense is related to a specific project, this field allows you to tag the expense accordingly. This is essential for project-based businesses where tracking costs against projects is crucial for budgeting, billing, and profitability analysis.  

Due Date: The due date field helps manage payment schedules.  

Payment Method: Specify how the expense will be paid (e.g., credit card, bank transfer, cash).  

Delivery Method: This field allows you to record how goods or services related to the expense were delivered. It is useful for logistical tracking and ensuring that delivery costs are accurately reflected in your expense records.  

Incoterm: Incoterms define the responsibilities of buyers and sellers for the delivery of goods under sales contracts. Including this field helps businesses manage international transactions and ensures clarity on who bears the costs, risks, and responsibilities during shipment.  

Total Discount: Record any discounts applied to the expense, which is crucial for financial accuracy and understanding the net cost after discounts. This helps in managing supplier relationships and ensures that all financial benefits are captured.  

Total Tax: This field calculates and displays the total tax applied to the expense, ensuring compliance with tax regulations and accurate financial reporting. It is essential for businesses operating in multiple tax jurisdictions.