Expenses

Recording your expenses is a key part of running a business and as a guest house owner your expenses will be many and varied. B&B Manager provides a comprehensive system for recording, calculating and viewing expenses. Along with your payment records, this provides the framework for producing weekly, monthly and yearly accounts.

Adding an Expense

To add a new expense to B&B Manager, click on the Expenses button on the toolbar, or click Expenses > View Expense from the top menu to show the Expenses screen. Then click on the Add button at the top of the screen, and enter the following expense details:

Description. A description of the expense (e.g. "Shower installation")
Type. The expense type - the available types are explained in more detail below. For a one-off expense, use "Capital Item" or "General Expense".
Category. The expense category. You can define your own categories in addition to the standard categories provided by B&B Manager
Account. The account to which the category is assigned.
Payment Method. How you paid for the expense.
Date. The date on which you paid the expense. This is important for capital items and general expenses.
Receipt Number. The receipt number for the expense. You should keep all expense receipts and cross-reference them against your B&B Manager records using the receipt number.
Actual Cost. The actual cost of the expense (how much you paid).
Amount Claimed. How much of the expense you are claiming against the business. You can set this by typing the amount directly, or by setting a percentage of the actual cost.
VAT Rate. The VAT percentage included in the actual cost of the expense. This is only required if you are VAT registered.

When you are finished, click the OK button to add the expense to your list of expenses. As your list grows, you can filter the list using the controls at the top of the Expenses screen. You can filter by the account to which the expenses are assigned and/or the expense category. So it is very easy, for example, to list all "Repairs & renewals" expenses in "Account 2007/08".

You will notice that for certain periodic expenses ("Daily", "Weekly", "Monthly", "Annual" and "PPPN") the "Amount Claimed" and "Total Cost" values in the Expenses screen are different. This is because, for these expense types, B&B Manager uses the "Amount Claimed" figure to calculate the full cost of the expense over the period of the account. So if, for example, your account runs for 1 year and you set up a monthly expense of £10.00, the total cost of the expense over the account will be 12 months x £10.00, or £120.00.

The Expenses screen has a further setting that you may find useful. At the bottom of the screen is a checkbox entitled Show expenses upto today only. If you tick this box, the "Total Cost" column of the periodic expenses will change to reflect the fact that you may only be part-way through the accounting period. So in the case of the monthly expense of £10.00, if the account starts on 1st January 2008 and finishes on 31st December 2008, by the time we reach 29th February 2008, we are two months into the account, so the total cost for the expense will be shown as 2 months x £10.00, or £20.00. You can use this setting to give you a better idea of how your expenses develop through the year. If you switch it off, your expense totals can look frightening, particularly early in the year!

Expense Types

As mentioned above, briefly, B&B Manager offers a range of expense types to assist you with the calculation of total expenses.

Capital Item. This should be used for one-off expenses (e.g. shower pump repair, new sofa for guest lounge)
Daily Expense. This can be used for fixed daily expenses. Whatever value you enter will be multiplied by the total number of days in the account to obtain the total cost.
Weekly Expense. This can be used for fixed weekly expenses (e.g. newspaper bill). Whatever value you enter will be multiplied by the number of weeks in the account to obtain the total cost.
Monthly Expense. This can be used for fixed monthly expenses (e.g. Broadband internet). Whatever value you enter will be multiplied by the number of months in the account to obtain the total cost.
Annual Expense. This can be used for fixed annnual expeses (e.g. Council tax). Whatever value you enter will be multiplied by the number of years in the account to obtain the total cost.
General Expense. This can be used instead of "Capital Item" for one-off expenses.
PPPN Expense. This can be used for fixed per-person-per-night expenses. Whatever value you enter will be multiplied by the number of guest-nights booked to the account to obtain the total cost.

The advantage of using the periodic expense types ("Daily", "Weekly", "Monthly", "Annual", "PPPN") is that you need only enter one record for the expense instead of, in the case of a monthly expense for example, twelve separate expenses. However, if you have an expense which varies from week to week or month to month, you will need to enter each instance of the expense as a new "General Expense" or "Capital Item" record.

Expense Categories

Although B&B Manager provides some preset expense categories, these may not suit your particular accounting requirements. Fortunately, it is very easy to set up your own categories, either by changing the existing category names. To add or update an expense category, select Expenses > View Expense Categories from the top menu. Then select the category you wish to change and click on the Edit button to view and update the details. To add a new category, click on the Add button and enter the new category name. You will now find that when you add or update an expense, any new categories you have added are included in the list of available categories on this screen. You can remove an expense category by clicking on it to highlight it, and clicking on the Remove button. If the button remains disabled when you highlight a category, the category has one or more expenses assigned to it, and cannot be removed.