Expense Claims

September 18, 2026 42 views admin
Expense Claims Expense Claim

Expense Claims — Complete User Guide — Two Accounts Web

Comprehensive guide for entering, validating, posting, and reporting expense claims — covering every field, enabling via Customize, Settings configuration, calculation logic, deep system impact, sample data with verified output, and accounting regulation compliance

Table of Contents

  1. What Is an Expense Claim?
  2. Enabling via the Customize Menu
  3. Related Settings and Configuration
  4. Navigating to Expense Claims
  5. Creating an Expense Claim — Field-by-Field
  6. Step-by-Step Entry
  7. Foreign Currency and Exchange Rate
  8. How It Posts to the General Ledger
  9. Calculation & Validation
  10. Reporting and Impact
  11. Sample Data and Output
  12. Accounting Regulation Validation

1. What Is an Expense Claim?

An Expense Claim records a business expense that was paid with personal money by someone the business will reimburse. The business consumes the goods or service now and owes the payer until a later payment settles it.

Typical examples:

  • An employee pays for travel, fuel, or office supplies from personal cash
  • A branch manager pays a supplier with personal funds during a field visit
  • An owner pays for inventory or fixed assets and will be reimbursed via the capital account
Document Who Pays When the Expense Is Recognized What Owing Is Created
Expense Claim A person (employee, capital account holder, or designated payer) Immediately on the claim date, to the selected expense or asset account A liability to that payer (Expense Claims, Employee Clearing, or Capital Accounts)
Purchase Invoice The business on credit (supplier) On invoice date Accounts Payable to the supplier
Payment The business from its bank account No new expense — settles a prior liability Reduces the payer or supplier balance and bank balance
Note: Every claim simultaneously creates an expense (or asset/inventory) on the Profit & Loss or Balance Sheet and a liability to the payer. Reimbursing the payer later is a Payment that clears that liability.

2. Enabling via the Customize Menu

The Expense Claims area is not visible in a brand-new business. Enable it first.

How to Enable

  1. Open the Customize Menu from the navigation bar (the menu icon at the top).
  2. Find Expense Claims in the list and toggle it on.
  3. Click Save.

After enabling:

  • The Expense Claims tab appears in the main navigation.
  • Settings → Expense Claim Payers appears for creating payers.
  • The report Reports → Expense Claims → Expense Claims Summary becomes available.
  • The Payers list inside Expense Claims lets you create named payers.
If you do not see Expense Claims: Confirm the Customize toggle is saved and refresh the page. If a card such as Expense Claim Payers is still missing in Settings, re-check Customize — Settings cards are hidden until their parent area is enabled.

Configure these items before entering the first claim so every dropdown is ready and reports classify correctly.

Setting Where What It Controls
Expense Claim Payers Settings → Expense Claim Payers The dedicated payer names selectable in the Paid By field. Each payer becomes a row in the Expense Claims Summary and maps to the Expense Claims liability account. Add a payer with New Expense Claim Payer → enter Name, optional Division → Save. Inactive hides it from new claims.
Employees Settings → Employees (and Customize → Employees) Employees can also be selected as the payer. When an employee is the payer, the liability posts to the Employee Clearing account instead of the Expense Claims account. Create the employee first if you will reimburse via Employee Clearing.
Capital Accounts Settings → Capital Accounts (Customize → Capital Accounts) Capital account holders can be payers when owners pay expenses. The liability posts to Capital Accounts and is broken down by capital subaccount if used.
Chart of Accounts Settings → Chart of Accounts The expense, asset, inventory, tax, and balance-sheet accounts selectable on claim lines. You can create custom Profit & Loss expense accounts and Balance Sheet accounts here; they appear immediately on claim lines. The system clearing accounts are: Expense Claims, Employee Clearing, and Capital Accounts.
Tax Codes Settings → Tax Codes Each tax code defines rate, posting account, and reporting category. Selecting a Tax Code on a line automatically splits the line into net and tax portions.
Divisions Settings → Divisions Optional tracking code per line or per payer. When a Division is set on a line, reports such as Profit & Loss, Division Exception Report, and Tax reports can be filtered by it. Employees and payers can also carry a default Division that is used as the tracking code for the balancing liability leg.
Projects Settings → Projects (Customize → Projects) When a Profit & Loss account is enabled for projects, each line can be tagged to a project for project-level reporting.
Inventory Items & Locations Settings → Inventory Items / Inventory Locations (Customize → Inventory Items) If a claim line will add stock, the Inventory Item and its control account must exist. When any line references an Inventory Item, an Inventory Location field appears at the top of the claim.
Custom Fields Settings → Custom Fields Add extra header or line fields — for example approval reference, vehicle number, or cost centre. They appear as additional columns or inputs on the claim form.
Themes / Footers / Email Settings Settings → Themes, Footers Control printed appearance and footers when you print or email a claim. Enable Custom Theme on the claim to pick a theme; enable Footers to attach reusable footer text.
Base Currency and Foreign Currencies Settings → Currencies Defines the business base currency (e.g., BDT) and any foreign currencies. Exchange rates are needed when a claim is in a foreign currency.
Opening Balances Settings → Opening Balances Use this to bring in outstanding amounts owed to payers before the system start date. Enter opening balances against the relevant clearing account (Expense Claims, Employee Clearing, or Capital Accounts) with the payer selected — these become the opening balance in the Expense Claims Summary.

4. Navigating to Expense Claims

  1. Open the Expense Claims tab from the main navigation.
  2. The list shows: Date, Reference, Paid By (payer name), Payee, Description, Amount.
  3. Use New Expense Claim to create a claim.
  4. Use New Expense Claim Payer (inside the same tab) to create a payer without leaving the area.
  5. Click any row to view the claim; use Edit to change it, Clone or Delete as needed.
  6. Related reports: Reports → Expense Claims → Expense Claims Summary and inquiry screens: General Ledger Summary / Transactions filtered to the clearing account.

5. Creating an Expense Claim — Field-by-Field

5.1 Header Fields

Field Required? What To Enter Effect / Validation
Date ✅ Yes The date the expense was incurred. This is the posting date for the expense and the liability. Determines the period for all reports. Future-dated claims affect future periods; back-dated claims restate prior period balances.
Reference ✅ Yes (auto or manual) Document number (e.g., EC-001). Leave on automatic to let the system assign the next sequence, or uncheck automatic and type a manual reference. Must be unique per business. Shown on ledger drill-downs and printed forms.
Paid By ✅ Yes Who paid with personal money: select an Employee, a Capital Account holder, or an Expense Claim Payer. The list is filtered to active payers only. Determines which clearing account is credited: Expense Claim Payer → Expense Claims, Employee → Employee Clearing, Capital Account → Capital Accounts. This also determines where the outstanding balance appears.
Payee ❌ Optional Free-text contact who ultimately received the money (e.g., supplier or merchant name). Type-ahead suggests previous values. Informational only; appears on the printed claim and on inquiry screens. Does not affect posting.
Currency & Exchange Rate ❌ Optional If the expense was in a foreign currency, select the currency (e.g., USD) and enter the exchange rate. You can enter either 1 Foreign = X Base or 1 Base = X Foreign using the toggle. When set, line amounts are entered in the foreign currency; the system converts to base currency for all ledger and report amounts using this rate and date. If no rate exists for that date, the most recent prior rate is used; if none, 1:1.
Description ❌ Optional Long-text narration for the whole claim (e.g., “Client visit Dhaka — travel & meals”). Shown on the claim view and ledger description. Does not affect posting.
Inventory Location Only when an inventory item is on any line The warehouse/location where inventory purchased via the claim is stored. Required when a line references an inventory item. Drives Inventory Quantity by Location and valuation reports.
Amounts Include Tax Checkbox Tick if line amounts already include tax (tax-inclusive); leave unticked if amounts are tax-exclusive and tax must be added on top. Changes how tax is calculated. When ticked, the tax portion is extracted from the inclusive amount; when unticked, tax is added.
Has Line Description column Checkbox Tick to show a Description text column per line; untick to hide it. Presentation only. The per-line description is stored even when the column is hidden.
Total Amount In Words Checkbox Tick to print the total in words on the PDF. Presentation only.
Custom Theme & Theme Checkbox + dropdown Tick to pick a custom print theme for this claim. Presentation only.
Show Tax Amount Column Checkbox (when tax codes exist) Tick to show a dedicated Tax Amount column in the line table. Helps verify tax split while entering.
Has Footers / Footers Checkbox + selection Tick and select reusable footer text (e.g., approval note) defined in Settings → Footers. Appears on printed/PDF claim.
Custom Fields As configured Any header-level custom fields you created in Settings → Custom Fields. Stored and shown as columns, filterable where supported.

5.2 Line — Common Fields (every line)

Field Required? What To Enter Effect
Item ❌ Optional Select a purchase item (e.g., a service or inventory purchase item) to auto-fill Account, Description, Quantity, Unit Price, Tax Code and Division. Convenience. Auto-fill can be overwritten per line.
Account ✅ Yes (unless Item supplies it) The ledger account for the expense: a Profit & Loss expense account (e.g., Travel Expenses, Office Expenses), an asset account (Fixed Assets, Inventory On Hand), or a control account requiring a sub-entity. Determines where the debit is posted. The account type controls which conditional fields appear below.
Line Description Only when the column is enabled Per-line narration (e.g., “Dhaka–Chittagong airfare”). Shown on ledger drill-down and print.
Quantity ✅ Yes Quantity consumed or purchased (e.g., 2, 0.5). Supports decimals. Multiplied by Unit Price to get the line total before tax.
Unit Price ✅ Yes Price per unit in the claim currency. Label shown as Unit Price. Multiplied by Quantity.
Tax Code ❌ Optional (only if tax codes exist) Select the applicable tax code (e.g., VAT 15%). The system automatically extracts or adds tax based on Amounts Include Tax. The tax portion is posted to the tax account defined by the tax code.
Division Only when the account is enabled for divisions Tracking code for segment reporting. Filters Profit & Loss, Division Exception Report, etc. If blank, the line is unassigned for division reports.
Project Only when the account is enabled for projects Project to tag this line. Used by Projects reports and profitability by project.
Custom Fields (line) As configured Line-level custom fields. Stored per line; can be shown as columns.

5.3 Line — Conditional Fields (appear only for certain accounts)

These fields appear automatically once an account of the matching type is selected. They are required when their account type is used.

When Account Is Field That Appears What To Select Why It Appears
Accounts Receivable Customer + Sales Invoice The customer and optionally the specific invoice being adjusted via the claim. Links the claim line to a receivable for customer-related reimbursements.
Accounts Payable Supplier + Purchase Invoice The supplier and optionally the invoice. Links to a payable for supplier-related claims.
Withholding Tax Payable Supplier The supplier whose withholding tax is affected. Tracks withholding tax per supplier.
Control Account for Capital Accounts Capital Account + Subaccount The capital account holder and subaccount (e.g., Drawings). Splits capital movements by holder and subaccount.
Employee Clearing Account Employee The employee whose clearing balance is affected. Posted against that employee's sub-ledger; not shown on Expense Claims Summary.
Inventory On Hand Inventory Item The inventory item purchased via the claim. Creates or augments a cost layer for that item; quantity is tracked in inventory reports. The header Inventory Location then becomes required.
Control Account for Special Accounts Special Account The special account entry. For special-ledger tracking.
Control Account for Fixed Assets Fixed Asset The fixed asset being acquired or adjusted. Posts to Fixed Assets at Cost; depreciation starts per asset settings.
Control Account for Intangible Assets Intangible Asset The intangible asset. Posts to Intangible Assets at Cost; amortisation follows.
Billable Expense Customer + Sales Invoice Customer to bill, and optional invoice (uninvoiced if blank). Marks the expense as billable to that customer for later invoicing.
Note: Conditional fields are hidden until their account type is selected, then become required. For example, selecting Inventory On Hand immediately reveals the Inventory Item dropdown filtered to items using that control account.

5.4 Line Totals and Tax — How Amounts Are Calculated

Each line shows calculated amounts (read-only) that update as you type:

Calculated Field Formula When Shown
Total Before Tax Quantity × Unit Price, rounded to currency decimals Always
Tax Amount Tax-exclusive: Total Before Tax × Tax Rate
Tax-inclusive: Total Before Tax − (Total Before Tax ÷ (1 + Tax Rate))		 When a Tax Code is selected
Total Tax-exclusive: Total Before Tax + Tax Amount
Tax-inclusive: Total Before Tax (already includes tax)		 When a Tax Code is selected and Amounts Include Tax is off → shows gross total
Rounding: Amounts are rounded to the business currency's decimal places (typically 2) at the line level. The sum of line totals is the claim total.

6. Step-by-Step Entry

Standard Expense Claim (paid by a designated payer)

  1. Open Expense Claims → New Expense Claim.
  2. Enter Date and Reference (or leave on automatic).
  3. Select Paid By → choose the Expense Claim Payer (e.g., “Branch Operations — Travel”).
  4. Optionally enter Payee (e.g., “ABC Line Transport”) and Description.
  5. Add lines:
    • Choose Account (e.g., Travel Expenses).
    • Enter Quantity and Unit Price (e.g., 1 × 5,000.00).
    • Select Tax Code if needed, set Division / Project if tracking.
    • Enter Line Description if the column is enabled.
  6. Check Amounts Include Tax if the unit price is tax-inclusive.
  7. Add more lines as needed (you can mix expense, asset, and inventory lines on one claim).
  8. Review calculated totals at the bottom. Click Create.

Claim Paid by Employee (posts to Employee Clearing)

  1. Same steps, but select Paid By → Employee (e.g., “MR X”).
  2. The balancing liability posts to Employee Clearing against that employee; it will not appear in the Expense Claims Summary but appears on the employee's clearing statement and Balance Sheet.

Claim Paid by Capital Account Holder (owner funds)

  1. Select Paid By → Capital Account (e.g., “MR. Y”).
  2. Liability posts to Capital Accounts under that holder, with optional subaccount.

Inventory Purchase via Claim

  1. Add a line with Account = Inventory On Hand (or its custom control account).
  2. The Inventory Item field appears — select the item (e.g., “Widget-X”).
  3. Enter Quantity and Unit Price (this creates a cost layer for that item).
  4. The header Inventory Location field appears — select the warehouse.
  5. Save. The item's quantity on hand and valuation are updated; later sales of that item will consume this layer using the item's FIFO/LIFO/Moving Average method.
Note: Using the Expense Claims clearing account directly on a line is incorrect. On an expense claim you select the expense or asset account on the line; the system automatically creates the balancing credit to the payer's clearing account. Do not add a manual line posting to Expense Claims.

7. Foreign Currency and Exchange Rate

When the expense is in a different currency from the business base currency:

  1. Select Currency in the header (e.g., USD while base is BDT).
  2. Enter Exchange Rate and choose the direction toggle (1 USD = X BDT or vice versa).
  3. Enter line amounts in the selected currency; the system also shows the equivalent in base currency.
  4. If the currency on a line's account differs from the claim currency, a Currency Amount field appears to enter the account's currency amount separately.

Conversion is applied at the claim date's rate. All reports in base currency use the converted base amount; the transaction retains the original currency amount for audit. Period-end revaluation of the clearing account (if foreign-currency denominated) is handled by the system's exchange gain/loss process.

8. How It Posts to the General Ledger

Every claim is balanced double-entry. For each line the system creates a detailed posting, then one balancing posting for the whole claim.

Per-Line Posting

For each line, the system posts the calculated line total (and any tax split) to the selected account, with all conditional sub-entities (customer, supplier, employee, inventory item, division, project, tax code, etc.) and quantities where applicable.

Balancing Posting

One balancing entry is created whose amount equals the negative sum of all line amounts (base-currency, with tax included). Which account this hits depends on Paid By:

Paid By Type Balancing Account Balance Sheet Presentation Where the Outstanding Balance Appears
Expense Claim Payer Expense Claims Current Liabilities Expense Claims Summary; General Ledger filtered to Expense Claims
Employee Employee Clearing Current Liabilities (per employee sub-ledger) Employee clearing statement; not in Expense Claims Summary
Capital Account holder Capital Accounts Equity (per capital account / subaccount) Capital Accounts Summary; Statement of Changes in Equity

Examples

Claim paid by Expense Claim Payer — single expense line 5,000 (no tax)
  Dr  Travel Expenses                        5,000
      Cr  Expense Claims (payer: Branch Operations)        5,000

Claim paid by Employee — same line
  Dr  Travel Expenses                        5,000
      Cr  Employee Clearing (employee: MR X)         5,000

Claim paid by Capital Account — same line
  Dr  Travel Expenses                        5,000
      Cr  Capital Accounts (holder: MR. Y)             5,000

Inventory purchase via claim — 100 units @ 120
  Dr  Inventory On Hand (item: Widget-X, qty: +100)  12,000
      Cr  Expense Claims (or Employee/Capital as above)     12,000

Taxable claim — 10,000 net + 15% VAT = 1,500 tax
  Dr  Office Expenses                       10,000
  Dr  Tax Receivable (VAT 15% account)       1,500
      Cr  Expense Claims                               11,500  (gross)
Settling the claim: Create a Payment with the same clearing account (Expense Claims / Employee Clearing / Capital Accounts) and the same payer selected, for the reimbursement amount. That payment reverses the liability: Dr Clearing Account → Cr Bank.

9. Calculation & Validation

The claim total and ledger amounts are derived deterministically from entered fields. All rounding uses the business currency's decimals (commonly two).

Line-Level Formulas

Total Before Tax = Quantity × Unit Price            (rounded)
If Tax Code is empty:
    Line Total = Total Before Tax
If Tax Code is set and Amounts Include Tax is OFF (tax-exclusive):
    Tax Amount = Total Before Tax × Tax Rate          (rounded)
    Line Total = Total Before Tax + Tax Amount
If Tax Code is set and Amounts Include Tax is ON (tax-inclusive):
    Tax Amount = Total Before Tax − (Total Before Tax ÷ (1 + Tax Rate))   (rounded)
    Net Amount = Total Before Tax − Tax Amount
    Line Total = Total Before Tax   (already gross)

Foreign currency:
    Base Amount = Currency Amount × Exchange Rate   (using dated rate, respecting Inverse toggle)

Document-Level Validation

Document Total (gross, base currency) = Sum of all Line Totals (base)
Balancing Entry Amount = − Document Total
Check: Sum(Line Debits) + Balancing Credit = 0   ✓  (always balanced)
Tax Split Check: For each taxed line, Net + Tax = Gross, posted to expense vs tax accounts

What to Verify After Saving

  • Open the claim view — the footer shows Gross totals matching the sum of line totals.
  • Open General Ledger Transactions filtered to the claim reference — confirm each line's debit to its expense/asset/tax account and the single equal credit to the clearing account.
  • For inventory lines, open Inventory Quantity Summary / Valuation Report — quantity and value reflect the new layer immediately.

10. Reporting and Impact

Every expense claim posts immediately; all reports that read the affected accounts reflect it on the next run. No batch post or closing step is required.

Area / Report How the Claim Appears Account Read
Expense Claims Summary Only claims where Paid By is an Expense Claim Payer. Each claim adds to the Expense Claims column for that payer and period; payments settle it. Expense Claims
Employee Summary / Employee Clearing Claims paid by an employee appear against that employee's clearing balance. Employee Clearing
Capital Accounts Summary Claims paid by a capital account holder appear against that holder (and subaccount if used). Capital Accounts
Balance Sheet Increases Current Liabilities (Expense Claims / Employee Clearing) or Equity (Capital Accounts). Asset claims increase Assets (Inventory, Fixed Assets, etc.). Clearing account + line accounts
Profit & Loss Statement Expense lines post to their Profit & Loss expense accounts immediately (accrual basis, on claim date). Not shown when the line is an asset/inventory account. Line expense accounts
Trial Balance Every claim contributes its debits and credits; the report remains balanced. Tax lines create entries on the tax account. All affected accounts
General Ledger Summary / Transactions Each line appears as a separate row with its account, division, project, tax code, quantity and amounts; the balancing row shows the clearing account and payer. All
Cash Flow Statement Expense claims do not appear as cash flows when raised — cash moves only when the later reimbursement Payment is made (Operating Activities). Inventory claims likewise only affect cash on payment. — (payment entry only)
Tax Summary / Tax Audit / Tax Reconciliation Tax amount from each taxed line posts to the tax code's account and appears in tax reports grouped by reporting category. Tax Payable / Receivable
Inventory Quantity Summary / Valuation / Value Summary / Quantity by Location Inventory lines (Account = Inventory On Hand) create quantity and value layers; subsequent sales consume them via FIFO/LIFO/Moving Average. Location filter reflects the header location. Inventory On Hand
Fixed Assets / Intangible Assets Summary Lines posting to those control accounts capitalize the cost; depreciation/amortisation then runs per asset settings. Fixed/Intangible at Cost
Division Exception Report Lines without a Division (when the account requires one) are flagged as exceptions. Line division assignment
Projects Report Project-tagged lines roll into project profitability. Line project assignment
Statement of Changes in Equity Capital-account payer claims appear as equity movements per holder. Capital Accounts
Note: A single claim can simultaneously affect Profit & Loss (expense), Balance Sheet (liability + asset), Trial Balance (both sides), Tax reports (VAT), Inventory reports (quantity/value), Division/Project reports (tracking), and later Cash Flow via its settlement payment. Every affected report reads the same General Ledger rows that the claim created.

11. Sample Data and Output

Base currency BDT • Period 1-Jan-2026 to 31-Mar-2026

11.1 Sample Setup

Record Details
Expense Claim Payer Branch Operations — Travel (Division: Operations)
Employee MR X (Division: Sales)
Capital Account holder MR. Y (Capital)
Inventory Item Widget-X (Control Account: Inventory On Hand, Valuation: Moving Average, Perpetual)
Tax Code VAT 15% — 15% rate to Tax Receivable account
Accounts Travel Expenses (P&L), Office Expenses (P&L), Inventory On Hand (Balance Sheet)
Division Operations, Sales
Project Project Alpha

11.2 Sample Documents

Claim EC-001 — Paid by Expense Claim Payer (taxable office expense)

Field Value
Date 15-Jan-2026
Reference EC-001
Paid By Branch Operations — Travel (Expense Claim Payer)
Payee City Office Supplies
Description Office stationery for Q1
Amounts Include Tax Off (tax-exclusive)
Line 1 Account: Office Expenses • Qty: 1 • Unit Price: 10,000.00 • Tax Code: VAT 15% • Division: Operations
Line 1 total before tax 10,000.00
Tax amount (15%) 1,500.00
Line total (gross) 11,500.00

Claim EC-002 — Paid by Employee (travel, no tax)

Field Value
Date 20-Jan-2026
Reference EC-002
Paid By MR X (Employee)
Line 1 Account: Travel Expenses • Qty: 1 • Unit Price: 5,000.00 • Division: Sales • Project: Project Alpha
Line total 5,000.00

Claim EC-003 — Paid by Expense Claim Payer (inventory purchase)

Field Value
Date 05-Feb-2026
Reference EC-003
Paid By Branch Operations — Travel
Inventory Location Main Warehouse
Line 1 Account: Inventory On Hand • Inventory Item: Widget-X • Qty: 100 • Unit Price: 120.00 • No tax
Line total 12,000.00

Claim EC-004 — Paid by Capital Account holder (travel, tax-inclusive)

Field Value
Date 10-Feb-2026
Reference EC-004
Paid By MR. Y (Capital Accounts)
Amounts Include Tax On (tax-inclusive)
Line 1 Account: Travel Expenses • Qty: 2 • Unit Price: 5,750.00 • Tax Code: VAT 15%
Total Before Tax (inclusive gross) 11,500.00 (2 × 5,750)
Tax extracted 1,500.00 (= 11,500 − 11,500 ÷ 1.15)
Net (posted to expense) 10,000.00

11.3 Ledger Verification (debits = credits)

EC-001 — Expense Claim Payer, tax-exclusive
  Dr  Office Expenses                                 10,000.00
  Dr  Tax Receivable (VAT 15%)                          1,500.00
      Cr  Expense Claims (Branch Operations)                       11,500.00
  Check: 10,000 + 1,500 − 11,500 = 0.00  ✓

EC-002 — Employee
  Dr  Travel Expenses                                  5,000.00
      Cr  Employee Clearing (MR X)                           5,000.00
  Check: 5,000 − 5,000 = 0.00  ✓

EC-003 — Inventory purchase
  Dr  Inventory On Hand (Widget-X, +100 qty)          12,000.00
      Cr  Expense Claims (Branch Operations)                       12,000.00
  Check: 12,000 − 12,000 = 0.00  ✓

EC-004 — Capital holder, tax-inclusive
  Dr  Travel Expenses                                 10,000.00
  Dr  Tax Receivable                                     1,500.00
      Cr  Capital Accounts (MR. Y)                            11,500.00
  Check: 10,000 + 1,500 − 11,500 = 0.00  ✓

Summary for Branch Operations payer (Expense Claims account):
  Credits to Expense Claims: 11,500 (EC-001) + 12,000 (EC-003) = 23,500
  → Opening + claims for period = 23,500 owed before any payment

Inventory impact — Widget-X:
  Opening: 0 qty, 0 value
  + EC-003: +100 qty, +12,000 value → 100 qty @ 120.00 average

11.4 Report Output for the Period

Expense Claims Summary (1-Jan-2026 to 31-Mar-2026)

Payer Opening balance Expense Claims Payments Net movement Closing balance
Branch Operations — Travel 0.00 23,500.00 0.00 23,500.00 23,500.00
(Employee and Capital payers do not appear here) — — — — —

Only EC-001 and EC-003 (both paid by the Expense Claim Payer) appear in this report. EC-002 (employee) and EC-004 (capital) are tracked against their own clearing accounts.

Profit & Loss Statement (same period, excerpt)

Account Amount (BDT)
Office Expenses 10,000.00
Travel Expenses 15,000.00 (5,000 EC-002 + 10,000 EC-004)
Tax Receivable impact 3,000.00 total tax (1,500 + 1,500) — not an expense, shown on Balance Sheet

Balance Sheet (at 31-Mar-2026, excerpt)

Account Balance (BDT)
Inventory On Hand — Widget-X 12,000.00 (asset)
Expense Claims 23,500.00 credit — liability owed to payer
Employee Clearing — MR X 5,000.00 credit — liability owed to employee
Capital Accounts — MR. Y 11,500.00 credit — equity
Tax Receivable 3,000.00 debit — asset recoverable

Trial Balance: Total debits (10,000 + 5,000 + 10,000 + 12,000 + 3,000) = 40,000 ; Total credits (23,500 + 5,000 + 11,500) = 40,000 → Balanced.

Settlement — Payment to reimburse Branch Operations (10-Mar-2026)

Field Value
Date 15-Mar-2026
Paid From Main Account (BDT)
Account Expense Claims — Payer: Branch Operations — Travel
Amount 11,500.00 (partial settlement of EC-001) 
Payment
  Dr  Expense Claims (Branch Operations)               11,500.00
      Cr  Cash at Bank                                             11,500.00
After payment, Expense Claims Summary:
  Branch Operations — Travel: Closing = 23,500 − 11,500 = 12,000  ✓
  (remaining: the EC-003 inventory purchase still owed)

12. Accounting Regulation Validation

Standard Requirement How the System Complies
Conceptual Framework — Double-Entry Every transaction must have equal debits and credits. Each claim posts line debits (expense/asset/tax) and one equal balancing credit to the payer's clearing account. Verification in Section 11.3 shows DR = CR for every document.
IAS 1 — Presentation Liabilities and assets must be presented separately; notes must explain movements. Amounts owed are presented on the Balance Sheet under Expense Claims (liability), Employee Clearing (liability), or Capital Accounts (equity). The Expense Claims Summary, General Ledger, and Trial Balance explain opening, movement, and closing.
IAS 19 — Employee Benefits (short-term) Reimbursements for employee-incurred expenses are recognized as a liability when the service/expense is incurred, and as an expense. When Paid By is an employee, the claim is recognized immediately as an expense and a liability to that employee (Employee Clearing), settled by a later payment — matching the timing the standard requires.
IAS 37 — Provisions, Contingent Liabilities Present obligations arising from past events that will require an outflow are recognized as liabilities. The approved claim creates a present obligation to reimburse; it is recognized as a credit in the clearing account and remains until paid.
Accrual Basis (IAS 1) Expenses are recognized when incurred, not when cash is paid. Expenses post on the claim date, not the reimbursement date. The Cash Flow Statement only shows cash when the payment reimburses the payer (Operating Activities outflow).
IAS 2 — Inventories Inventory purchased is capitalized at cost; expense (COGS) is recognized when sold, at FIFO/LIFO/Moving Average. Inventory lines on a claim debit Inventory On Hand at the claimed unit cost and create a cost layer. Later sales consume it via the item's valuation method. No immediate Profit & Loss expense for the purchase.
IAS 16 / IAS 38 — Property, Plant & Equipment / Intangibles Asset purchases are capitalized, not expensed. Lines posting to Fixed Assets at Cost or Intangible Assets at Cost are capitalized on the Balance Sheet; depreciation/amortisation starts per the asset card.
IAS 21 — Foreign Currency Transactions in foreign currency are recorded at the spot rate on the transaction date; subsequent settlement differences go to Profit & Loss. Foreign-currency claims are converted at the dated exchange rate; base amounts are stored alongside the original currency amounts for proper translation.
IFRS 7 / VAT Law — Tax Presentation Tax charged on purchases is presented as recoverable; reports must separate net from tax. Tax codes split each line into net (expense/asset) and tax (Tax Receivable/Payable). Tax Summary, Tax Audit and Tax Reconciliation group by reporting category.
IAS 7 — Statement of Cash Flows Only actual cash movements are operating cash flows. The claim itself has no cash entry. Only the subsequent reimbursement Payment appears in Cash Flow Statement — Operating Activities — which is correct.
Note: For every sample document in Section 11, the system simultaneously satisfies accrual expense recognition, correct liability placement, double-entry balance, tax separation, and inventory capitalization. Any review that checks Expense Claims Summary ↔ General Ledger ↔ Trial Balance ↔ Balance Sheet ↔ Profit & Loss will trace the same amounts — a closed audit loop.

End of Expense Claims Guide

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