Expense Tracking Documentation


To chart the accounts for Expense Tracking, similar to how income and invoicing are handled, we need to focus on categorizing expenses into specific accounts and tracking payments. Here`s an example of how the chart of accounts for expense tracking could be structured:

Account CodeAccount NameAccount TypeDescription
5000Office SuppliesExpenseCosts for stationery, paper, and office materials.
5100Software SubscriptionsExpenseCosts for SaaS tools, software licenses, etc.
5200Employee ExpensesExpenseReimbursable expenses incurred by employees.
5300Marketing ExpensesExpenseAdvertising, PR, and promotional activities.
5400Travel ExpensesExpenseBusiness travel, accommodation, and related expenses.
6000Accounts PayableLiabilityAmounts owed to suppliers for services/products.
1000Cash/BankAssetCash in hand or bank balances.

Example Transaction Flow: Tracking Software Subscription Expenses

Step 1: Recording a New Software Subscription Expense

Your startup purchases a monthly software subscription (e.g., for $500).

AccountDebitCredit
Software Subscriptions (5100)$500
Accounts Payable (6000)$500

Step 2: Paying the Software Subscription Invoice

You pay the $500 software subscription invoice from your bank account.

AccountDebitCredit
Accounts Payable (6000)$500
Cash/Bank (1000)$500

Summary of Expense Tracking Workflow:

  • Record the Expense: Debit the specific expense category (e.g., Software Subscriptions) and credit Accounts Payable to reflect the pending liability.
  • Pay the Expense: Debit Accounts Payable and credit Cash/Bank to close the liability and reflect the payment.