When you operate as a company, every payment must be linked to a supporting document. In most cases, this is an invoice.
When a payment remains open and you need to justify it, several options are available. With BILLY, it's very simple 🤗
Simply go to the Expenses tab, then Missing expenses. On the payments, using the three small dots, you can:
Either Upload the supporting document directly;
Or click on Other justification, in which case you will be asked to specify one of the four following situations.
1️⃣ Private payment
You have made a payment for personal use from the company account.
In practice, the payment is recorded as an advance made by the company on your behalf. In your accounts, this amount is to be reimbursed to the company: it affects your current account.
2️⃣ Business payment - Supporting document already uploaded
In this case, you have already uploaded a supporting document to your accounts (manual import or via Peppol). This may be an invoice, a till receipt, a receipt, a purchase order, etc. demonstrating a purchase made for your professional activity. This is the normal and recommended situation.
This allows you to verify the expense, to recover VAT if the invoice is correct, and to correctly classify the cost.
This is always the preferred option, even if it is simply a photo of a receipt taken with your phone. It is better to have this link in the accounts than a justification "outside the accounts".
3️⃣ Business payment - Direct debit
You are in this situation if you have a recurring payment where you receive no invoice but you have a contract or an initial document that serves as a supporting document. In this case, the absence of a document linked to the payment does not mean that the expense is irregular.
This typically applies to rent or an insurance premium.
⚠️ You must keep the corresponding contract or subscription confirmation somewhere. In the event of an audit, this reference document will justify the recurrence of the direct debits.
4️⃣ Business payment - No supporting document
This option allows you to process a payment despite the absence of a supporting document.
Non-deductible expense
You have paid a professional expense but cannot find the supporting document. You do not want to hold up your accounts while waiting for a supporting document and you do not want to take any risk by recording this payment as a tax-deductible expense.
As with a private payment (point 1), this amount is recorded against your current account.
Deductible expense
In this case, you decide to record the payment as a deductible expense. You have no supporting document in your accounts: you must therefore be able to justify the professional expense in the event of a tax audit.
For example, you made a purchase in a shop and lost the receipt. You justify the expense with a photo of the item purchased, an order confirmation email, or any other means of justifying this payment.
⚠️ Every professional expense must be provable. Without a supporting document, a cost may be rejected during a tax audit, any VAT recovered will have to be repaid, and your accounts may be deemed irregular.
Find out more about the conditions for tax deductibility of an expense.
If in doubt, contact the live chat at the bottom right or your dedicated accountant directly.
See you soon!