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Deep Dive: Best practices for using the Expensify Cards with an indirect accounting integration
Are you using Expensify Cards and one of our direct integrations with QuickBooks Online, NetSuite, Sage Intacct or Xero? If yes, we have you covered with automatic reconciliation, check out the links to learn more. If you are using QuickBooks Desktop or an indirect accounting connection, keep reading!
Here are a few tips for managing Expensify and the accounting process around the Expensify Card
Each day, as purchases are made on your Expensify Cards, the pending balance (including any holds for things like pay-at-pump fuel, hotel authorizations, etc.) is withdrawn from your Expensify Card Settlement Account (your business bank account).
Each month, on the day of the month that you enabled Expensify Cards (or switched from Daily to Monthly Settlement), the pending balance of all purchases since the last settlement payment is withdrawn from your Expensify Card Settlement Account (your business bank account).
Use the Settlements Dashboard to see the settlement withdrawals
To see which Expensify Card transactions fell into which settlement, take a look at the Settlement report. It can be found under Settings > Domains > [domain name] > Company Cards > Reconciliation tab > Reconcile: Settlements. Plug in the dates you’d like to see and review the settlements for that date range.
The numbers you will see here are:
- Card Payment Total - these are amounts withdrawn from your business bank account to pay for Expensify Card spend
- Pending Credit - these are temporary authorizations which will likely be refunded within the next 7 days
- Reconciliation Discrepancy - this is the difference between the Card Payment Total and the Imported Total (i.e., total expenses) for the same period.
Note: If there is a variance, this will be shown on the Reconcile Settlements tool as a Reconciliation Discrepancy. The discrepancy should be seen by searching for an entire month in the Reconcile Settlements tool. You can also get the details by clicking on the discrepancy (shown in red), to reveal the full window and download the discrepancy report.
This dashboard doesn't link back to the actual expenses in Expensify, so it shouldn't be used for reconciliation. It's mostly useful for admins who want to see spend broken down day-by-day. Click the little arrow next to each settlement date to see the individual transactions within that settlement.
Use the Expenses Dashboard to see realtime spend
The best place to go to see realtime Expensify Card spend over a date range is the Expensify Reconciliation Dashboard (located at Settings > Domains > [domain name] > Company Cards > Reconciliation tab > Reconcile: Expenses). By plugging in a date range (or a single date in both fields), Domain Admins can see the total of all purchases made over that date range, the total for each card, and the approved and unapproved amount. By clicking into any of those numbers, you can drill down into the individual expenses.
The three numbers you’ll see after running the Reconciliation report are:
- Imported Total - these are all the Expensify Card expenses that occurred during the month
- Approved Total - these are all the finalized Expensify Card expenses
- Unapproved Total - these are any Expensify Card expenses which are not finalized, you should prepare an Accrual to account for these.
Reconciling your Expensify Card spend
Because we bill for pending transactions, it's likely that you won't be able to add individual expense lines together to equal the daily settlement amounts. Because of this, it's much easier to reconcile at the end of the month using sum totals. Here's how you can reconcile your bank statement against expenses:
0. Before using your card, you will want to set up your policy so that expenses export to either a clearing account or a liability account of your choosing. Once you have created this account in your books, if you have a direct accounting connection head to Settings > Policy > [policy name] > Connections > Configure > Non-reimbursable > select the account from the dropdown. If you don't have a direct connection, then just ensure that you are uploading your expense reports to one of these newly created accounts.
- At the end of the month, your bank statement will contain the settlement withdrawals from your Expensify card. Reconcile these along with your normal reconciliation process by comparing Expensify Card withdrawals to the Settlement Table.
- In Expensify, head to Settings > Domains > [domain name] > Company Cards > Reconciliation tab > Reconcile: Settlements, enter the date range for the month, and click “Run”. Confirm that the Card Payment Total matches the sum total of the settlement withdrawals from your bank statement.
- For all Expensify Card withdrawals, create a journal entry that credits the checking account and debits the clearing account or a liability account you set up in step #0. This journal entry will move money from the checking account to pay the clearing or liability account.
- Next, head to Settings > Domains > [domain name] > Company Cards > Reconciliation tab > Reconcile: Expenses, enter the date range for the month, and click “Run”.
- Ideally, you will want to export as many reports as possible. This will allow your books to reflect the most up-to-date posted expenses. If you have any Unapproved reports, go ahead and approve before exporting.
- Once exported, the expenses will net against the checking account payments. If you have an underpayment, this means all reports have not exported. If you have an overpayment, this means that there were pending payments that have yet to clear on the reports.