Getting paid

Expenses, VAT & Profit

What the work cost, what the tax position is, and what the month actually made once wages and expenses come off.

Why this is not the Reports page

Reports answer "how much did we invoice". This answers "what did we keep". They are different questions and the second one needs three things the first does not: what you paid out, what the hours cost, and what of the tax is yours rather than the taxman's.

The accounting page: profit and loss for the selected period at the top, the expense list below it, and the VAT position beside them.

Expenses

An expense is a cost the business carried: fuel, parts bought for stock, insurance, a subscription, a van repair. Record it with the amount net of VAT and the VAT separately, exactly as the supplier's invoice prints it.

Field	What it is for
Amount	The net cost, before VAT.
VAT	Copied from the supplier's invoice as printed, not calculated from a rate. Deriving it would reclaim a figure the supplier may never have charged.
Reclaimable	Off for VAT that is charged but cannot be recovered — client entertainment is the usual one. It still reduces profit; it just never reaches the VAT return.
Supplier and reference	So a line on the P&L can be traced back to a piece of paper.
Recurring	Recorded once and counted every period, for the costs that do not stop: insurance, rent, a phone contract.

Worth knowing

Expenses recorded against a specific job also feed that job's costing, so the margin on a job includes the parts bought for it rather than just the labour.

What the hours cost

Every person has a pay type on their team record, and it is what turns clocked hours into money on the profit and loss.

Pay type	How it is costed
Unpaid	Their hours cost the business nothing. The default, and the honest starting state — an owner who does not draw a wage through the timesheet is not somebody whose cost is zero by accident.
Hourly	A rate per hour, applied to the hours actually clocked.
Salary	A fixed amount per week, month or year, charged pro-rata across the reporting period whether or not anybody clocked in. A salary is owed regardless, so costing it from hours would make a quiet February look profitable.

What this does not do

Where somebody has clocked hours but no rate, the accounting page says so out loud rather than costing them at zero. A wage bill that silently omits a person is worse than one that admits it is incomplete — it produces a profit figure that looks fine and is not.

VAT

The VAT position sets the tax you charged against the tax you can reclaim, for whatever period you pick. Output VAT comes from your invoices; input VAT from the expenses marked reclaimable. The difference is what is owed or due back.

Set your VAT number under Settings so it appears on the documents that need it. A business that is not VAT registered can leave all of this alone — the page works without it, which matters because most sole traders start below the threshold.

What this does not do

This is a reading of your own records, not a filed return, and it does not submit anything to a tax authority. It is the figure to check against — and to hand to whoever does file.

Profit and loss

One period, three lines: what was invoiced, what was spent, and what the hours cost. Everything is drawn from records already in the system, so there is nothing to keep in step by hand.

It works with or without an accounting integration. Connect Xero or QuickBooks and invoices, payments and expenses stay in step with them; connect neither and none of this stops working, which is the point — a business without an accountant's software is exactly the business that most needs to see whether the month made money.

Worth knowing

Reading what a colleague earns is its own permission, deliberately separate from managing the team. Somebody who adds and removes people is not automatically somebody who should see everyone's salary, so the wage bill can appear as a single line without opening the breakdown behind it.