How to set up your Invoice and Expense Items

Expense Items vs Invoice Items

In Trackops, the terms Expense Item and Invoice Item mean two very different things, and it is important to understand the difference between the two concepts.  An Expense Item is something you reimburse a staff member for, such as their mileage or time.  An Invoice Item is something you bill to your client.  When adjusting rates in the system, be sure to apply the the appropriate values in each section. As a rule of thumb, your expense item rates should always be lower than your invoice item rates.

Creating your Invoice and Expense Items

Before you can enter your invoices and/or expenses, you need to tell the system what you want to track.  To configure your items, click the Settings tab and then click the Invoice & Expense Items link.  Trackops comes pre-populated with several items, which you are free to edit or delete if they are not relevant to your operation.  However, for this tutorial, we will discuss creating new items.

Click the New Item button at the top of the page to enter a new Invoice/Expense item, as shown below:

finance_item_form.png

As you can see above, Invoice Items and Expense Items are combined in the Trackops system.  

For each item that you add, you will need to determine if it is an expense item, an invoice item, or both.  In most cases, you will create an item that is both an expense item and invoice item. This innovative concept makes it simple for Trackops to convert your expenses into invoices without double entry or the need to look up the rates you pay your investigators or bill your clients.

If you have marked the item as an expense item, you must choose which "Rate Type" it is:

  • Hourly Rate -Tracks the time spent during an investigation.  Typically used for tracking the "hours worked" or other time measured activities.  Your employees or vendors will enter the number of hours (or fractions of hours) they worked, and the system will automatically calculate the amount they will be reimbursed based on their rate per hour.  E.g. Work Hours, Travel Hours, Computer Time, Phone Time, etc...
  • Fixed Rate - Tracks an expense that is always reimbursed at the same rate (non-time related).  Fixed Rate items are very similar to Hourly Rate  items, except they do not deal with time.  For example, if your item is "Mileage", your employees or vendors will enter the number of miles driven, and the system will calculate the amount they are to be reimbursed based on their rate per mile.
  • Variable Rate -Tracks the actual cost of an expense.  For example, if your investigator were to send a package or stay in a hotel, the cost of this item or service will vary depending on where and when they purchased it.  The system assumes you will reimburse the employee or vendor for exactly what they spent on the item or service.

You will also be able to set a "Default Rate".  This is the typical rate that you would pay an investigator or vendor for the expense they are entering.  Don't worry, this rate is easily modified on a per employee basis through the use of price lists.

If you have marked the item as an invoice item, you'll need to enter a default "Invoice unit rate" and "Default Tax Rate.  This is the typical price and tax rate that you would charge a client for this item or service.  Similar to expense items, you will be able to override both the unit rate and tax rate on the client's price list.  

Finally, you can enter a default description for this item.  When the invoice is generated and this line item is used, the default description will be automatically populated.  When converting from an expenses to invoices, the explanation of the matching expense (if any) will supersede the default invoice description.

Other Settings

Item Code - Use this field to map your item to other financial frameworks.  For example, when setting up your system for LEDES Invoice Exports, you may wish to identify the appropriate ABA Expense Codes that match your items so they can be properly identified when generating exports of this type.

Reference ID - Use this field to provide mapping for this item in other billing systems.  For example, in some Quickbooks Online integrations, you may be required to look up your items by ID instead of name.  This setting will assist you in that lookup process.

Once you've finished setting setup your Expense and Invoice items, you'll be ready to customize your price lists.

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