Hacks for nailing your expense management process — for free
I’ve processed an ungodly amount of expense documents over the past 15 years. I’ve done so as a nonprofit CEO, a project manager, a nomadic freelancer, and a private person. I’ve mostly had to track costs to stay within budgets and make sure I meet accounting and financier compliance requirements, but also to keep my mind over money at times of limited liquidity. Over the years I’ve optimized my digital expense management process quite a bit. I figured that sharing my workflow could save you a ton of hassle.
- Using a cost ledger
First of all, I keep a list of expenses (a cost ledger) in Excel, which has columns for core data around each expense: product/service, vendor, project account, sum and issue date. Since a ledger is basically a chronological list of expenses, I group the expenses into months.
If necessary, I also enter the VAT/sales tax data, due date, reimbursement requirements, payment source (invoice, company card, personal), payment status, currency details, comments, etc.
The ledger, as well as the actual documents / files, are stored on Dropbox. That way both my accountant and I share the data. I considered using Google Sheets for the ledger, but it does not support grouping data into months (the +/- buttons for expand-collapse) and it’s also a little slower than Excel. More interestingly, we stick to Dropbox over Google Drive because it is MUCH better for scanned documents — more on that later.
2. Managing documents and files
Regarding my files, they are stored according to calendar year, accounts payable/accounts receivable, and the month.
Expenses end up in my monthly folders in three ways:
- I just save the documents (in case of run-of-the-mill digital invoices that I get as email attachments);
- I print-to-pdf the email into the designated folder (for flight tickets, Uber receipts, etc. that land in my inbox in email format)
- I snap a photo of paper documents (usually for bills and payment receipts in retail setting).
Paper documents are the trickiest. Whenever such expenses incur, I scan the underlying documents with my phone. I used to use the regular camera feature, but recently fell in love with the scan feature in the Dropbox mobile app. Each scan is super fast — in part due to the excellent UI flow, which usually limits the entire operation to 5 taps, but also because the app’s autofocus feature saves me the trouble of editing the scans. You can also keep files light-weight by replacing the photo grade scans with B/W renderings.
Ideally, I try to scan documents on the spot, but that means I need a surface, decent lighting and a social setting where I do not come across as full OCD. Alternatively, I scan during an idle moment later that day. At times the papers do pile up until I need to submit them, but this is less frequent now that scanning on-the-go has become a habit.
3. Entering data to the ledger
There is one last step before my accountant is happy — I need to make sure that data from the scans end up in the cost ledger and that the file names make sense (i.e. go beyond the default titles of attachments and scans). That is a straight-forward, if tedious affair. Once or twice a month I just manually enter the data from each document into the ledger. I also manually update the file names according to this format: vendor — yyyymmdd — project account — product/service — invoice # (if applicable).
This manual data entry component is the most broken part of the workflow, but it’s difficult to optimize until the world develops a standard for accounts payable. There are paid products that read data with optical character recognition, such as the pro version of Dropbox. Expense management solutions also go the extra mile of categorizing the data for accounting systems, but these are bound by language restrictions and national accounting regulations. So for now, manual data entry remains the only unpaid approach for keeping track of your costs.
