Add an out-of-pocket expense

This article explains how to record your out-of-pocket expenses in FreeAgent.

You should record a business cost as an out-of-pocket expense if the cost was paid for using personal funds on behalf of the business. If the business then reimburses you for the cost, you will need to explain the expense repayment.

However, if the cost was paid for using business funds, you should explain the bank transaction instead once it’s been imported into FreeAgent via a bank feed or bank statement upload. Alternatively, you can add a bill if the cost has been incurred but hasn’t yet been paid for. Find out more about the difference between an expense, a bill and a bank payment.

Adding an out-of-pocket expense

Navigate to the 'Expenses' tab at the top of the screen and select the relevant user from the drop-down menu.

Please note that if you’re the only user on the FreeAgent account, you’ll not have the option to select the relevant user as your user profile will be selected automatically.

Select ‘Add New’ and choose ‘Expense’ from the drop-down menu.

You can either upload a receipt using Smart Capture to auto-fill some of the details, or manually enter all of the remaining details of the out-of-pocket expense.

Uploading a receipt using Smart Capture

In the ‘Attachment’ section, select ‘Upload to Smart Capture’.

You’ll be taken to the Files area of your account where you can upload the relevant receipt.

Once you’ve uploaded the receipt, select the three dots to the right of the total value and select ‘Create expense’.

Smart Capture will attempt to automatically extract the date, total value and suggest a category.

Review the details, enter any remaining information and select ‘Create New Expense’ at the bottom of the screen to complete the process.

Manually entering all of the out-of-pocket expense details

If you have any paperwork that relates to the expense (e.g. a receipt), you can attach a scanned copy by choosing ‘Upload a file’ from the 'Attachment' area and following the instructions.

If you used the FreeAgent mobile app to upload a file to the Files area of your account, select 'Choose from saved files' instead and follow the instructions.

Attaching an image file to an expense will remove it from the Files area of your FreeAgent account.

Expense details

Choose whether this was a payment or a refund from the ‘Type’ drop-down menu. It'll usually be a payment but sometimes you might need to record a refund, for example if the employee was paid back using personal funds for something they previously claimed on expenses, such as a train ticket which was not used because there were engineering works in progress.

Category

Select the relevant expense category from the ‘Category’ drop-down menu. You can add a new category if you need to, for example, clothing or petrol.

Date

Enter the date of the expense. Please note that the earliest an expense should be dated is your FreeAgent start date. If you enter an expense dated before your FreeAgent start date, this will add a negative brought forward balance in the Expenses area. 

Currency

Select the currency that you used to pay for the expense from the ‘Currency’ drop-down menu. If the currency used is different from your base currency, find out how to add a foreign currency expense.

Amount 

Enter the expense amount from the receipt in the ‘Total Value’ field.

Description

Enter a description of the expense.

Link to project

To link this expense to a project, select the relevant project from the ‘Link to Project’ drop-down menu.

You can then choose to re-bill it to that project's customer, at cost, with a mark-up, or at a specific price, if you wish.

Setting up a recurring claim

If this expense is going to happen again in the future, for the same user and the same amount, for example a mobile phone voucher, select the relevant frequency using the ‘This Expense recurs’ drop-down menu.

Once you've entered the relevant details for the expense, select 'Create New Expense' to complete the process or 'Create and Add Another' to add this expense and start adding another one.

The expense will then be added to the list of costs incurred by the selected user.