Updated Aug 15, 2023
You can record your expenses right inside Dubsado so that your bookkeeping is all in one place. Recorded expenses can be categorized and will appear in the chart of accounts so that you can keep track of where you are spending in your business.
Creating expense categories
Before recording your expenses, we recommend setting up some expense categories. The chart of accounts is the best place to create and manage expense categories:
Go to Reporting >> Chart of Accounts.
Click the Expense Category + button.
Enter a Name for the category.
Choose a Type.
Click Add.
Expense category types
When creating expense categories, you'll need to choose between Cost of goods, Operating, and Non-Operating as the expense type. We encourage you to consult your accountant, but here are some basic definitions of the expense types:
Cost of goods: The cost of raw materials, paid labor, and overhead required to produce any tangible products you sell. Overhead is used to account for indirect expenses that you incur while producing the product, such as paying for utilities. For example, a wedding stationer would need to purchase paper supplies to create invitations. The expense of the supplies would be considered the cost of goods.
Operating: Ordinary and necessary business expenses, such as office supplies, software subscriptions for running your business (like Dubsado!), payment processing fees, and rent.
Non-Operating: Used for expenses that are outside normal business operations, such as interest expenses if you take out a business loan.
Recording expense transactions
Under Reporting >> Transactions, you can manually record general business expenses or project-specific expenses using the Expense + button. Dubsado does not have any integrations to record expenses automatically.
General business expenses: Leave the Project dropdown blank.
Project-related expenses: Select the related project from the Project dropdown. Expenses are not visible to clients and will not appear on invoices.
When you select an Expense Category, Dubsado will add this expense to the total for that category in the chart of accounts. Expense categories can be created while you are recording an expense by clicking New Category.
FAQ
Will expenses show up on a client's invoice if I tie them to a project?
Will expenses show up on a client's invoice if I tie them to a project?
No, expenses are not shown on invoices. However, if you go to the Invoices >> Expenses tab within a project, you can see a net profit for that project!
Which expense categories should I create?
Which expense categories should I create?
Some basic examples include office supplies, payment processing fees, computer software, and marketing. Since categorizing your expenses properly is critical to tax preparation, we recommend consulting your accountant or tax professional.
What if I don't use expense categories?
What if I don't use expense categories?
It's ultimately up to you! However, if you do not use expense categories and later decide to start using them, all of your expenses up to that point would be in the Uncategorized expense category. If you did want to categorize past expenses, it would need to be done manually for each individual transaction.
What happens if I delete an expense category?
What happens if I delete an expense category?
Deleting an expense category will move all of the expenses in that category to Uncategorized. Recategorizing those expenses would need to be done manually for each individual transaction.