How expenses work

An expense is a supplier invoice — what you were actually charged, as opposed to what you allowed in the estimate or committed in an order.

It is the third of the three cost numbers, and the one that closes the loop.

Number	From	Question
Allowed	The BOQ	What did I price?
Committed	Purchase orders	What did I promise to pay?
Actual	Expenses	What was I charged?

Why record them here as well as in your accounting system

Because your accounting system knows what you spent, and this knows what you spent it on.

An invoice in Xero coded to “Materials” tells you the business bought $4,612 of materials. The same invoice recorded against the concrete item on the Hendricks job tells you the slab cost $362 more than the order, which is a number you can act on.

Both are worth having, which is why expenses can be exported to Xero rather than entered twice.

Point every expense at something

An expense is only useful if it points at:

• A costing — which job it belongs to
• An order, where one exists — so committed and actual can be compared
• Items or cost centers — so the cost lands in the right trade

An expense floating loose against a job still adds to the total, but tells you nothing about where the money went, and will not show up as an overrun against anything.

Match to the order wherever there is one

It is the matching that produces the useful number. An invoice recorded against a job costs you the data entry and gives you a total; an invoice matched to its order gives you the variance, which is the thing worth knowing.

The life of an expense

1. The invoice arrives from the supplier.
2. Record it, against the costing, matched to its order.
3. Check it against the order — quantity, rate, total.
4. Query anything that does not match before it is paid.
5. Export to Xero for payment and the books.
6. Watch it come back — once exported, SmarteBuild reads the bill’s status from Xero, so paid, part paid and voided all show here without you checking twice.

Step four is the whole reason to do this promptly. Once an invoice is paid you are asking for a credit; before it is paid you are asking a question.

Generating an expense from an order

Generate Invoice on a purchase order creates the expense from the order — supplier, items, quantities and values already filled in.

This is the fastest route and the one that guarantees the match. Use it, then adjust anything the supplier actually charged differently, so the variance is explicit rather than buried.

In this section

• Recording an invoice
• Matching to an order
• Cost to date against budget
• The expenses list