Expenses¶
Last reviewed: 2026-03-31 · Nnamdi
Status: Complete
Route: /expenses → /expenses/new → /expenses/:id
1. What is it?¶
An Expense is money the business has paid out — for supplies, utilities, professional fees, transport, or any other running cost. Every expense is linked to a COA expense account (the category), posted to the General Ledger immediately, and tracked for Input VAT. Expenses differ from Bills: an Expense is paid on the spot, while a Bill is a supplier invoice the business owes but hasn't paid yet.
2. How does it work in Finora?¶
2.1 The expenses list (/expenses)¶
Header actions: - Columns — toggle which columns are visible - Template — download CSV template for bulk import - Import — bulk-import expenses from CSV - + Record Expense — opens the new expense form
KPI summary cards: | Card | What it shows | |------|--------------| | Total Expenses | Count of all expense records | | Total Amount | Sum of all expense amounts (including VAT) | | With Receipts | Count and percentage of expenses that have a receipt document attached | | Input VAT | Total input VAT across all expenses (claimable against output VAT) |
Search and filter: - Search bar: searches by expense number, supplier, description, or category - Payment Method filter: All / Cash / Bank Transfer / Card / Mobile Money / Cheque - Receipt filter: All Expenses / With Receipts / No Receipts
Table columns: - Expense # — auto-assigned (e.g. EXP-2026-00001), sortable - Date — date expense was incurred, sortable - Supplier — supplier the payment was made to, sortable - Description — brief description of what was purchased - Category — COA expense account name (e.g. Office Supplies & Stationery) - Receipt — icon indicating whether a receipt document is attached - Amount — total amount paid, with VAT shown in parentheses if applicable - Actions — Download PDF, View Details
Detailed Expense Breakdown (bottom of page): - Tabs: By Account Category / By Description Category - Time Period filter: Last 30 Days / Last 3 Months / Last 6 Months / This Year / Last Year / All Time / Custom Range - Provides a breakdown of spending by category for the selected period - This is the same data as the dashboard Expense Breakdown chart, with more filters
2.2 Recording a new expense¶
Click + Record Expense. Fields:
Expense Details: | Field | Required | Notes | |-------|----------|-------| | Date | Yes | Defaults to today | | Amount (Excl. VAT) | Yes | Enter the pre-VAT (base) amount | | Supplier | Yes | Select from existing suppliers or click "+ New" to create inline | | Category | Yes | Maps to a COA expense account (6xxx codes) — determines the GL debit account | | Payment Method | Yes | Cash / Bank Transfer / Card / Mobile Money / Cheque | | Description | Yes | Brief description of what was purchased |
Category is the GL account. When you select "6200 - Office Supplies & Stationery", the GL debits account 6200 directly. Choose the category that matches what was purchased.
Receipt/Supporting Documents: - Upload photos of receipts, invoices, or other supporting documents - Formats: PNG, JPG, WebP, PDF — max 750KB each - Drag and drop or click to upload; or click Choose Files / Take Photo - Recommended for all expenses; FIRS may require receipts during an audit - A warning is shown on the expense detail page if no receipt is attached
Tax Classification: | Field | Notes | |-------|-------| | Tax Category | Extensive dropdown per Nigeria Tax Act 2025. Selecting a category auto-fills VAT and WHT rates | | VAT Rate | Defaults to 7.5% (Standard). Zero-rated and exempt categories (e.g. Educational Services, Medical Services, Basic Food Items) will show 0% | | VAT was charged | Checkbox — tick if the supplier charged VAT on this expense | | WHT was deducted | Checkbox — tick if WHT was withheld at source on this expense |
The Input VAT note says: "Input VAT is recoverable if supplier has valid TIN." — TIN status matters for reclaiming input VAT.
Common Tax Categories (non-exhaustive): - Standard Goods / Standard Services — 7.5% VAT - Professional Services / Legal Services / Accounting Services / Consultancy — 7.5% VAT - Educational Materials / Educational Services — 0% (exempt) - Medical Services / Medical Equipment — 0% (exempt) - Basic Food Items / Agricultural Inputs — 0% (exempt) - Residential Rent / Commercial Rent — specific rules apply
Action buttons: - Cancel — discards and returns to list - Save as Draft — saves without posting to GL - Create Expense — creates and posts to GL immediately
2.3 Expense detail page (/expenses/:id)¶
Header actions: - Edit — opens the expense for editing (if not yet voided) - Void Expense — reverses the expense and its GL entry - Download PDF — downloads a PDF summary
Detail panels: - Date, Payment Method, Paid To (supplier), Category - Description - Amount Details table: Base Amount / Input VAT (x%) / Total Amount - Attached Receipts: shows uploaded documents; button to add more; warning if none attached
Summary footer: Base Amount / VAT / Total Paid
General Ledger Audit (expandable): shows the journal entry with Valid/Invalid status
GL for a VAT-inclusive expense paid in cash:
| Account | Description | Debit | Credit |
|---|---|---|---|
| 6200 Office Supplies & Stationery | Expense EXP-XXXX - [Description] | ₦85,000 | — |
| 1040 Input VAT Recoverable | Input VAT on Expense EXP-XXXX | ₦6,375 | — |
| 1010 Cash on Hand | Payment for Expense EXP-XXXX | — | ₦91,375 |
- The expense base amount debits the COA expense account selected
- Input VAT debits account 1040 (Input VAT Recoverable — a current asset to be claimed against output VAT)
- Cash is credited by the full amount (base + VAT)
GL for a bank transfer expense: - Same structure, but credits 1020 Cash at Bank instead of 1010 Cash on Hand
3. Business rules & constraints¶
| Rule | Detail |
|---|---|
| Every expense posts to the GL on creation | Draft expenses do not post; only "Create Expense" posts |
| Category = GL account | The expense category directly determines which COA account is debited |
| Amount entered is pre-VAT | Finora calculates and adds VAT separately; the Amount field is the base (excl. VAT) |
| Input VAT goes to account 1040 | 1040 Input VAT Recoverable is netted against output VAT in VAT returns |
| Supplier must exist or be created inline | Expense must be linked to a supplier record |
| Receipt attachment is optional but recommended | No hard block on saving without a receipt — but a warning is shown |
| Expenses can be edited before voiding | Once voided, a reversing entry is created; a new expense must be recorded |
| WHT on expenses is rare | WHT is usually the business deducting from supplier payments (Bills), not expenses |
4. Nigerian regulatory context¶
Input VAT recovery - When a VAT-registered business pays VAT on purchases, it can claim that VAT back against the output VAT it has collected from customers - Finora tracks input VAT in account 1040 (Input VAT Recoverable) - The VAT return calculation is: Output VAT (from invoices) − Input VAT (from expenses) = Net VAT Payable to FIRS - Input VAT is only recoverable if the supplier has a valid TIN — Finora notes this on the expense form
Receipt retention for FIRS - FIRS requires businesses to keep receipts/supporting documents for at least 6 years - The receipt attachment feature in Finora allows businesses to store digital copies alongside the expense record - Without receipts, expenses may be disallowed during a FIRS audit
Nigeria Tax Act 2025 - The Tax Classification section references the Nigeria Tax Act 2025 (which consolidated several previously separate tax acts) - Certain categories are zero-rated or exempt: educational materials and services, medical goods/services, basic food items, agricultural inputs, baby products, etc. - Schools purchasing textbooks may classify them as "Educational Materials" (0% VAT) rather than "Standard Goods" (7.5%) — the category auto-fills the correct rate
WHT on expenses - Typically, WHT is deducted by the business when paying a supplier for services (recorded on Bills, not Expenses) - In some cases, a supplier may have already deducted WHT from the amount invoiced — the checkbox captures this - If WHT was deducted, the business should receive a WHT certificate from the supplier
5. Common customer questions¶
Q: "What's the difference between an Expense and a Bill?"
An Expense is paid immediately — cash or bank transfer on the spot. A Bill is a supplier invoice you've received but haven't paid yet (accounts payable). Use Expenses for petty cash purchases, fuel, utilities paid upfront. Use Bills for supplier invoices with payment terms.
Q: "My Total Expenses on the dashboard doesn't match what I see on the Expenses page."
Check the date filter on the dashboard. The dashboard KPI reflects the selected period; the Expenses page shows all records. Set both to "All Time" and compare. If they still differ, escalate to Tier 3.
Q: "Why does my expense show a different VAT amount than I expected?"
Check the Tax Category selected. "Unclassified" defaults to 7.5%. If the purchase is educational materials or another exempt category, change the Tax Category to get 0% VAT. Also confirm the Amount entered is the pre-VAT (excl. VAT) figure.
Q: "I forgot to attach the receipt. Can I add it later?"
Yes — open the expense detail page and click "Add Receipts" or "Add receipt now" in the warning panel. Receipt documents can be added at any time after the expense is created.
Q: "Can I claim back the VAT I paid on expenses?"
Yes, if you are VAT-registered. Finora tracks input VAT in account 1040 (Input VAT Recoverable). When you file your VAT return (Tax Management → VAT Returns), this input VAT is automatically netted against your output VAT to calculate the net VAT payable.
6. Known edge cases¶
Expense Breakdown shows "No expenses found"¶
The Expense Breakdown section at the bottom defaults to "Last 30 Days". If all expenses were recorded in a prior period, the breakdown will appear empty. Change the Time Period filter to "All Time" or "This Year" to see data.
Input VAT on zero-rated purchase¶
If a business records an expense under a category that should be zero-rated (e.g. Educational Materials) but checks "VAT was charged on this expense", it will record input VAT where there should be none. This inflates the input VAT balance. Advise the business to correct the Tax Category — or to confirm with their supplier whether VAT was actually charged.
Cash vs Bank Transfer affects the GL credit account¶
- Payment Method: Cash → Cr 1010 Cash on Hand
- Payment Method: Bank Transfer → Cr 1020 Cash at Bank
- If the wrong payment method is selected, the GL will show the wrong bank/cash account being reduced. Expenses can be edited to correct this if caught before void.
Supplier with no TIN¶
The expense form allows selecting a supplier with "No TIN" status. Input VAT on that expense may not be recoverable during a VAT audit. Finora shows the note on the form but does not block the save. Advise businesses to record supplier TINs.
7. Escalation trigger¶
Escalate to Tier 3 (Founder) if: - General Ledger Audit shows "Invalid" on an expense's journal entry - Expense Total Amount on the list does not match the sum of Base + VAT shown on the detail page - Dashboard expense total does not match the Expenses page total (after confirming identical date range) - A voided expense is still appearing in reports
Escalate to Tier 2 (Support Lead) if: - CSV import failed or produced incorrect data - Business wants to bulk-categorise or re-categorise expenses - Business unsure which Tax Category to use for a specific purchase type
8. Last reviewed¶
2026-03-31 — Nnamdi. Verified against production. Record Expense form fully captured including all Tax Category options (Nigeria Tax Act 2025). Expense detail page confirmed: Amount Details table, Attached Receipts section (with warning when empty), GL Audit panel. Sample expense EXP-2026-00001: ₦85,000 base + ₦6,375 VAT = ₦91,375 total. GL: Dr 6200 Office Supplies ₦85,000 / Dr 1040 Input VAT Recoverable ₦6,375 / Cr 1010 Cash on Hand ₦91,375.