This article is an extract from the book 'Everything you need to know about Xero Practice Manager'
Get a copy for your desk at www.linkedpractice.com
When running jobs in XPM, we have two types of costs. We have time costs, which are created by time sheets against tasks on a job, and we have disbursements. Disbursements are any cost associated with completing the job that is not a time sheet. Disbursements are also known as costs in XPM. These costs could be from subcontractors that do not do time sheets, outsourcing fees, and any general disbursements such as Xero subscription fees. In this section we’ll be covering how to manage each type, and the considerations you need to make.
Disbursements are costs incurred directly on a job either as a result of a cost incurred in delivering that job, eg. flights, accommodation mileage, etc. However they occur, it is important that all non-time costs are added to a job in order to measure job profitability correctly.
The best people to be adding job-related disbursements to jobs are the people who have incurred them. This should be done at, or shortly after, the time they have incurred the cost along with completing their regular time sheet. Like time sheet transactions, we want a finite list of disbursements set up in our ‘Business > Settings > Costs’ area with any fixed rates, eg. mileage @ $0.70/km added. Below are some suggestions:
- Mileage @ $x/km
- Annual Return Filing Fee
- Plus any other costs you typically incur on behalf of your clients as part of delivering services for them.
When using a finite list of job cost categories like this, it is essential that our team pick from the dropdown list when adding costs to a job. This will make Job Profit reports much easier to read as we won’t have pages of unique expenses to file through. They will be grouped by the job cost category.
If these disbursements are incurred on a credit card, you can either wait for your monthly credit card statement or enter them as they occur. There is no way in XPM to scan a receipt and have it store against the job like you can with Xero. There is also no third-party app that can do this.
Adding job costs is independent of any staff expenses or reimbursement process you may have in your practice. There are many apps out there that connect to Xero to allow your team to submit, approve and reimburse expenses. None of these integrate with XPM so your team will need to separately submit any expenses they have incurred personally via the staff expenses app you choose to use. Xero provides its own staff expenses app called Xero Expenses, which is a good option if your team regularly incur personal expenses and you don’t have any tool or process for managing these. They will then need to be re-entered into XPM as costs where they relate to jobs.
Enjoy this article? Buy the book.
Need help setting up, fixing up, or getting up to speed on Xero Practice Manager?
We can help at www.linkedpractice.com