Managing expenses

The Expenses section (also called inbound invoices) is where you manage bills from your suppliers — the invoices you receive and need to pay.

The expenses page

Navigate to Accounting > Expenses to see all your inbound invoices. Each entry shows:

• Invoice number — The supplier's invoice reference.
• Supplier name — Who sent the invoice.
• Amount and currency — The total value of the invoice.
• Status — Whether the invoice has been paid, is unpaid, or is overdue.
• Line items — A preview of what the invoice covers.
• Payment status — Whether a bank transaction has been matched to this invoice.

Adding expenses

There are two ways to add expenses:

Upload and parse

1. Click Upload expense.
2. Upload a PDF or image of the invoice.
3. Financica's OCR engine (powered by Amazon Textract) will extract:
   • Supplier name and details
   • Invoice number and date
   • Line items with descriptions and amounts
   • VAT information
   • Payment terms
4. Review the extracted data and correct any errors.
5. Save the invoice.

UBL import

If you receive invoices in UBL XML format (common in European electronic invoicing), you can upload them directly. The structured data is parsed without OCR, resulting in higher accuracy. See Electronic invoicing for more details.

Hosted invoice import

If you receive invoices hosted on platforms like Stripe or Xero, you can import them by pasting the URL directly. See Hosted invoice imports for details on supported platforms and how it works.

Stripe invoice import

If you receive invoices through Stripe Billing, you can import them directly from the Stripe hosted invoice URL:

1. Copy the Stripe invoice URL from your browser or email. It looks like https://invoice.stripe.com/i/acct_…/live_….
2. Navigate to the Upload expense page.
3. Press Ctrl+V (or Cmd+V on Mac) to paste the URL.
4. Financica will automatically fetch the invoice data, line items, and PDF attachments from Stripe.
5. The imported expense opens for review.

This import method extracts structured data directly from Stripe's API — no OCR is needed, so the result is highly accurate. Invoices are deduplicated by their Stripe invoice ID, so pasting the same URL twice will link to the existing expense rather than creating a duplicate.

Approving expenses

Expenses go through an approval workflow before they create journal entries in your books.

• Needs review -- When an expense is first uploaded or created, it starts in this status. The data can be freely edited.
• Approved -- Click Approve to post the expense. This creates the corresponding journal entries (expense accounts, VAT legs) and locks the invoice content. Once approved, the expense appears in your financial reports.
• Remove approval -- If you need to make changes after approval, click Remove approval from the expense detail page. This reverses the journal entries and returns the expense to the "Needs review" status. If a bank transaction was consolidated with the expense, the consolidation is also reversed.

VAT inclusive/exclusive toggle

Each expense has a Price includes tax toggle that controls how line item amounts are interpreted:

• Off (default) -- Line item amounts are net (exclusive of VAT). VAT is added on top.
• On -- Line item amounts are gross (inclusive of VAT). VAT is calculated backwards from the total.

This is useful when dealing with receipts or invoices where prices are shown including tax.

Tax scheme

Each expense invoice has a tax scheme that controls how VAT is posted to your books. You can set the tax scheme from the expense detail page.

Domestic

The default. VAT on the invoice is treated as standard input VAT, reclaimable on your local VAT return. The deductible portion goes to the VAT Input account and any non-deductible portion goes to VAT Input (Non-deductible).

Foreign VAT

Use this when a foreign supplier has charged their local VAT (e.g. a French hotel charging TVA). Foreign VAT cannot be reclaimed on your domestic VAT return. Instead, the deductible portion is posted to a Foreign VAT Recoverable account. You reclaim it separately via a foreign VAT refund scheme.

Reverse charge

Use this for cross-border B2B services where the supplier charges 0% VAT and you self-assess VAT at your local rate. Financica automatically calculates the self-assessed amount using your organization's default local VAT rate (set in Settings > Organization). The posting creates a pair of entries that net to zero: a debit to Reverse Charge Input VAT and a credit to Reverse Charge Output VAT. Both must be declared on your VAT return even though they cancel out.

If the reverse charge input VAT is only partially deductible (e.g. for a partially exempt business), the non-deductible portion is posted to VAT Input (Non-deductible) as usual.

Expense details

Click any expense to view its full details:

• Invoice content — All extracted line items, amounts, and totals.
• Supplier information — Name, address, and VAT number.
• Payment applications — If a bank transaction has been matched to this invoice, you will see the payment link.
• Related documents — The original uploaded file and any additional supporting documents.
• Audit trail — A history of all changes made to the invoice record.

Filtering and search

• Search — Find invoices by supplier name or invoice details.
• Unreconciled filter — Show only invoices that have not been matched to a bank transaction.

Converting from a transaction

If you have already imported a bank transaction (for example, from a bank statement) and want to create a matching expense:

1. Open the transaction from Accounting > Transactions.
2. Upload the supplier invoice as a document attachment.
3. Click Convert to expense on the attachment.
4. Financica parses the document and creates a new expense.
5. The bank transaction is automatically linked as payment for the new expense.

This is the fastest way to reconcile expenses when you start from the bank side.

Reconciling expenses

When a bank transaction matches an expense invoice:

1. The invoice status updates to show the payment.
2. The transaction and invoice are linked for audit purposes.
3. Both the transaction and invoice detail pages cross-reference each other.

This linking can happen automatically when uploading documents to transactions, or manually from the invoice detail view.

How payment linking affects the transaction

When you link a bank transaction to an expense, Financica handles the accounting automatically so your books stay correct without extra steps on your part.

The linked leg is locked. The portion of the bank transaction that matches the invoice is marked as an invoice payment and shown with a lock icon in the transaction detail view. You cannot re-categorise it while the link is active -- its "category" is the invoice itself. Unlink the payment to free the leg for manual editing.

Partial payments create a split. If you apply only part of a bank transaction to an invoice (for example, a 500.00 EUR transfer where only 300.00 EUR covers this particular expense), Financica splits the transaction leg into two:

• The applied portion (300.00 EUR) is locked as the invoice payment.
• The remainder (200.00 EUR) remains a separate, freely editable leg that you can categorise as you normally would.

This keeps each part of the transaction independently addressable without creating extra transactions in your books.

Unlinking a payment reverses the split. If you remove the link between a bank transaction and an expense, any splits are merged back and any locked leg is freed for editing, restoring the transaction to its state before linking.

Transaction consolidation

When you link a bank transaction to an invoice, Financica may consolidate the invoice journal entry and the bank transaction into a single transaction. This happens when:

• The payment amount exactly matches the invoice total.
• It is the first payment applied to the invoice.
• The transaction has a simple structure (same currency, clear bank and category legs).

When consolidated, you see one transaction in your transactions list that contains both the bank movement and the full invoice breakdown (expense accounts and VAT). This is the ideal outcome for simple, fully-paid invoices.

If consolidation is not possible -- for example with partial payments, multi-currency transactions, or complex leg structures -- the invoice journal entry and bank transaction remain as two separate transactions. Both are visible in your transactions list and cross-reference each other. This is normal and your books are still correct; the two transactions together represent the complete picture.

If you unlink a consolidated payment, the consolidation is reversed and the original transactions are restored.