Expense Categories in Odoo

There is a type of expense that companies incur for their employees, which consists of the money that a company incurs on behalf of its employees in order to complete a task that has to be completed as part of their responsibilities as an employee in the company. These costs may include travel, food, communication, office supplies, etc. As a result, the employee must pay for these demands out of his or her own pocket in order to meet them. Due to this, the company will refund the employee’s money as a result of the situation. Managing these costs effectively is essential for guaranteeing employee happiness.

By using Odoo, a business is able to manage these costs effectively and efficiently. As an employee’s salary may be paid directly by the employer, or occasionally through the employee’s payslip, it may be possible for the employer to remit the money directly to the employee.

For a company to maintain an open and equitable workplace, it is vital to carefully handle employee expenses and reimbursements when it comes to employee expenses and reimbursements.

Including modules in Odoo 16, businesses can now easily integrate reward systems for employee compensation through payroll.

In order for the employee to be reimbursed, the user must set him from the schedule on his next paycheck. From the settings, enable Reimburse in Payslip.

Configuration > Settings > Reimburse in Payslip > Save

Configuring Expense Category

 The expense category is a  classification of an employee’s numerous expenses, such as travel, food, and communication costs. Select the Expense Categories option under the Configuration tab to view and add a new category.

Configuration >  Expense Categories > NEW

 We can introduce meals as a new category. Price, Unit of Measurement, Internal Reference, and Taxes are included in detail. Either the Cost or the Sales Price might be used to re-invoice the client for the expense, the Cost is picked here. There was also an internal note inserted. For later use, a category should be saved.

Creating Expenses for Employee

Create a new expense for the employee. To add a new expense go to the My Expense and create a new one. 

My Expense > NEW

Here, James is the employee who pays the debt. The money is used for lunch with the client. They chose food as a side and spent $299. One of those employees, James, paid the bill. In that case, the due date is June 7th so the debt will be paid on the salary in July.

If any receipt or bill needs to be attached with the expense this can be done by using the ATTACH RECEIPT button. Then click on the CREATE REPORT to create the Expense report.

All expenses spent by the employer can’t be refunded by the company. Refunds were therefore issued only after checking the reliability of the expenditure. he wants to submit an expense report to the manager for that purpose.

When the report is submitted for managers’ approval, the manager will either approve or refuse the expense report.

After adding approval the manager has two options. One is to Post the journal entries and the second one is to report the expense into the next payslip.

Here is an approved expense report for the employee James. The debt will be paid through his salary. So let’s go to the Payroll module to create a new payroll for employee James.

Creating Payslips for the Employee

Employee compensation is a complete record that includes information about an employee’s salary, discounts, allowances, and other information for a specific period of time This includes information such as employee contracts, and compensation plans. Let’s check how the Employee Payslip is configured in Odoo.

To create a new payslip go to the Payslip tab and choose the To Pay menu.

There is a list of created payslips. So click the NEW button to create a payroll for employee James.

Choose the employee, James, then the contract added inside the employee will automatically be chosen there. The time and pay schedule can be updated in the payroll. A smart tab named expense is added, which is the expense that was created just now.

The employee must have a running contract in order to be counted towards an employee’s compensation. To see if the contract is open use the back of the contract link.

The contract contains details like the Start date and End date of the contract, Salary Structure, Department and Job position of that employee, Contract type, and HR Responsible are added here. Make sure the contract is in the Running phase.

The  Salary Information tab of the contract contains the monthly wage of the employee.

Return to the Payslip after that. The user wishes to make sure the necessary rule to include the expense in the payslip is added to the structure before computing the payslip. To do it, click the Salary Structure external link.

All new rules are suggested at the opening of the reward system. This set of guidelines will be used to calculate a payslip. Expenses to be added to wages and rules for reimbursement of expenses. This rule alone has been incorporated into the system, and will add costs to salaries.

Open the rule and check the status added to the rule. Here the condition and computation are added based on Python code.

Then go back to the Payslip. In the payroll, the Worked Days & Inputs tab is available. The employee’s attendance details and other inputs like expense and child support are added in this tab. While checking here the Expense is automatically added here as an Input.

Then click on the COMPUTE SHEET button. Then check the Salary Computation tab to view the computed salary.

In this case, the reimbursement rule includes an allowance of $299, which is the amount of expenses incurred by the employee in the previous month.

This means that the employee’s expenses are covered by the employee’s next month’s paycheck.

This streamlined approach ensures consistency and compliance and enhances employee happiness by providing a simple and transparent payment process linked to their salaries. Using the sophisticated capabilities of Odoo 16, companies can optimize their cost management, enabling them to be more productive and in control of finances. The configuration of the employee expense and the method of reimbursement via payslip are described in full here.