# Introduction - Expenses

An expense is money already spent, recorded after the fact.

**Video coming soon:** Recording spend that never had a vendor bill behind it.

There is no order and no approval chain: you paid for something, and the books need to know. Use it for card spend, cash, mileage and anything else where a formal vendor bill never existed.

![The Expenses screen listing sixty-four expenses with columns for Expense Date, Expense Account, Reference Number, Vendor, Paid Through, Customer and Status. The first row is coded to Other Expenses against Ironbridge Abrasives Ltd, paid through the Current Account, and carries a Draft status.](https://www.sorviai.com/help/expenses/expense-list.png)

*Expense Account is the profit-and-loss line the cost lands on. Customer is filled only when the cost is rebillable.*

## Expense or bill

The distinction is about timing, not size. A bill is something you owe and have not yet paid. An expense is something already paid for. Choosing wrongly does not lose the money, but it does misstate what you owe.

| You have | Record it as | Because |
| --- | --- | --- |
| A vendor invoice due in 30 days | Bill | It is a liability until you pay it |
| A card receipt from this morning | Expense | The money has already gone |
| A subscription charged monthly to a card | Recurring expense | Already paid, and it repeats |
| A supplier statement to pay next month | Bill | Payment is still outstanding |
| Petty cash for stamps | Expense | No invoice, no liability |

> **Note:**
>
> **An expense never appears in payables**
>
> It cannot, because nothing is owed. If a cost you have recorded as an expense is showing up on a supplier statement as unpaid, it should have been a bill.

## What an expense posts

One line out of a payment account, one line into an expense account, plus tax if it is recoverable. That is the whole entry, which is why expenses are the simplest document in Finance and the easiest to get slightly wrong.

1. **Money leaves**: Card, cash or bank
2. **Expense recorded**: Coded to an account
3. **Appears in P and L**: On the account you chose
4. **Tax claimed**: If recoverable