An expense budget sets aside an amount for an expense type, such as a subconsultant or reimbursable expenses, on a project. It can be tied to one or more expense phases so that expenses entered against it count toward those phases and bill the right way. This article follows an expense from setup through the invoice.
How the Pieces Fit Together
Expense types are defined in SETTINGS > Lists > Expense Types. Each expense type has a Type (Standard, Subconsultant, or No Cost) and an optional Default Price Per.
An expense phase is a phase on the project's Budget tab with For Expense/Subconsultant checked.
An expense budget ties one or more expense types to one or more expense phases.
Each expense entered with that expense type is matched to the budget. The phase on the expense decides how the expense counts and how it bills.
Setting Up an Expense Phase
Go to PROJECTS, open the project, and click the Budget tab.
Add a phase to the fee breakdown, or edit an existing phase, and check For Expense/Subconsultant.
Set the Billing Type to Fixed Fee or Hourly. For Fixed Fee, set the Fixed Fee Type to Percent Complete or Milestone Complete.
Enter the phase budget amount.
An expense phase cannot be Non-Billable, cannot have child phases, and cannot have time logged to it. Its budget amount is entered directly as a dollar amount.
Setting Up an Expense Budget
Create the expense phase first, because only expense phases can be tied to an expense budget.
On the project's Budget tab, find Subconsultants and Expense Budgets and click Add Expense Budget.
Choose the Expense Type(s).
Check Included in Services Fee? if the budget amount is part of the project's overall fee. The list of phases appears when this is checked.
Under Phases this expense budget is included in, choose the expense phase or phases for the budget.
Enter the Estimated Pay to Vendor(s) (excl. tax) and an optional Markup. Estimated Charge to Client is calculated as the estimated pay plus the markup.
Select For Additional Services if the budget is for additional services, then save.
When the budget has one expense type, you can also set a Vendor and a Default Price Per. Expenses entered with that type start with the budget's price, markup, and vendor.
Rules for expense budgets:
Each expense type can be on only one expense budget per project.
Subconsultant expense types are chosen one at a time. Standard types can be combined in one budget, and No Cost types can be combined in one budget.
Each phase can be tied to only one expense budget.
Phases can be tied to a budget only when Included in Services Fee? is checked.
All phases tied to the same budget share the same billing type, Hourly or Fixed Fee.
Choosing a Phase on an Expense
When an expense is entered from the project's Expenses tab (Add Expense) or from TIME > Enter Time > My Expenses, the expense type is matched to the project's expense budget.
The budget is tied to one phase: the phase is filled in automatically.
The budget is tied to more than one phase: a Phase dropdown appears. Select a phase on every expense whose type is tied to more than one phase. The phase is required when any of the tied phases is Hourly.
The expense type has no budget, or the budget has no phase: no Phase field appears.
An expense without a phase does not count toward any phase's actuals, and it is left out of per-phase amounts on the invoice.
Expenses synced from QuickBooks follow the same matching. When the budget is tied to more than one phase, the expense arrives without a phase and shows a Missing Phase status. Open the expense, select the phase, and save. The same status is available as a filter on the BILLING > Synced Transactions page.
Changing a budget's phases does not update expenses that were already entered. An expense entered before its budget was tied to phases has no phase until the expense is opened and saved. When the budget has one phase, saving fills it in. When the budget has several phases, select the phase before saving.
Billing Expenses on the Invoice
Expenses are billed on the Prepare Invoice screen (BILLING > Prepare Invoices). Every unbilled expense on the project is listed on the Expenses tab, and each one is set to one of three choices:
Bill Now adds the expense to the invoice as its own line, with its markup.
Bill Later keeps the expense unbilled so it can go on a later invoice. This is the starting choice for every expense.
Do Not Bill keeps the expense off the invoice.
Expenses on Hourly Phases and Budgets Not Included in the Fee
These expenses are visible on the Expenses tab. Choose Bill Now for each expense to put it on the invoice. When the hourly phase is set to Not to Exceed, the expenses billed to that phase count toward its limit together with its hourly time.
Expenses on Fixed Fee Phases
Bill expenses tied to a fixed fee phase from the Fixed Fee tab, on the expense phase's row, the same way as any other fixed fee phase. Do not choose Bill Now for these expenses on the Expenses tab.
This applies to expenses whose budget has Included in Services Fee? checked and is tied to a Fixed Fee phase, or tied to no phase. These expenses are hidden on the Expenses tab by default. Setting Show All Expenses? to Yes displays them in italics, marked as included in the fee.
Billing the expense phase on the Fixed Fee tab updates the phase's Invoiced amount, Remaining amount, and percent complete.
The Expenses column on the Fixed Fee tab shows the total of the expenses linked to that phase for reference. It does not change the phase's Remaining amount.
An expense marked Bill Now on the Expenses tab is added to the invoice as its own line. It does not change the phase's Invoiced amount, Remaining amount, or percent complete, so the phase still shows its full fee as unbilled. Billing the phase on the Fixed Fee tab then charges the same cost a second time, once in the phase fee and once as the expense line.
Set Show All Expenses? to Yes to review these expenses.
If an invoice already includes a fixed fee expense as its own line:
On a draft invoice, change the expense to Bill Later on the Expenses tab, then save the draft.
On a finalized invoice, void the invoice, redraft it, and change the expense to Bill Later in the new draft. Voiding the invoice returns its expenses to Bill Later.
Expenses With No Phase
Expenses with no phase appear on the Expenses tab and bill as their own lines. They do not count toward any phase's actuals or Not to Exceed limit. When the expense type's budget is included in the fee and has no phase, these expenses are hidden by default like the fixed fee expenses above.
Expenses on Draft and Finalized Invoices
An expense on a draft invoice cannot be edited or deleted from the project's Expenses tab or from My Expenses. While the expense is set to Bill Now, it can be edited from the invoice's Expenses tab.
Deleting a draft invoice, or voiding an invoice, returns its expenses to Bill Later. Voiding and redrafting an invoice keeps its expenses set to Bill Now on the new draft.
Expenses on a finalized invoice cannot be edited or deleted. Void the invoice to return them to Bill Later.