Expenses Overview

What are Expenses?

Expenses are money spent by your organization on operational costs such as rent, utilities, supplies, salaries, bank charges, or other business needs. In Agatabo, expenses are automatically recorded in the general ledger, reduce bank account balances, and appear on financial reports.

Why Track Expenses?

Key benefits:

Know exactly how much you’re spending and on what
Create budgets and monitor spending against targets
Generate accurate financial reports (Profit & Loss statement)
Ensure accountability and transparency
Track spending trends over time
Manage reserve fund usage
Separate operational expenses from capital expenditures
Maintain complete audit trail

How Expenses Work

Spend money

Organization pays for something (rent, supplies, bank charges, etc.)

Record in Agatabo

Enter the expense with title, amount, date, and details

Select funding source

Choose bank account or reserve allocation to fund the expense

Automatic journal entries

Agatabo creates double-entry accounting records

Bank balance updates

Selected bank account balance decreases automatically

Appears in reports

Expense shows on Profit & Loss and expense reports

Types of Expenses

1. Standard Operating Expenses

Regular operational costs paid from bank account cash. Journal Entry:

Kind: EXPENSE_PAYMENT
Date: Expense date

Dr OPERATING_EXPENSE      Amount
   Cr CASH (Bank Account)  Amount

Example:

Office rent for June: 50,000 RWF

Dr OPERATING_EXPENSE (Rent)  50,000
   Cr CASH (Operations Account)  50,000

Bank Account Balance:
Before: 500,000 RWF
After:  450,000 RWF (decreased)

When to use: Regular operational costs, utilities, salaries, supplies, etc.

2. Reserve-Funded Expenses

Expenses paid from designated reserve allocations (emergency fund, specific reserve). Journal Entries (Two entries created): Entry 1: Reserve Release

Kind: RESERVE_RELEASE
Date: Expense date

Dr CASH (Bank Account)       Amount
   Cr RESERVE_ALLOCATION     Amount

Entry 2: Expense Payment

Kind: RESERVE_EXPENSE
Date: Expense date
Parent: Reserve Release Entry

Dr OPERATING_EXPENSE         Amount
   Cr CASH (Bank Account)    Amount

Example:

Emergency equipment repair: 100,000 RWF from Emergency Reserve

Entry 1 - Reserve Release:
Dr CASH (Operations)           100,000
   Cr RESERVE_ALLOCATION (Emergency)  100,000

Entry 2 - Expense:
Dr OPERATING_EXPENSE (Repairs)  100,000
   Cr CASH (Operations)         100,000

Net Effect:
- Reserve balance: -100,000 RWF
- Cash: unchanged (released then spent)
- Expense recorded: +100,000 RWF

When to use: Emergency expenses, planned spending from reserves, restricted fund usage Learn more about reserves →

3. Bank Charges

Bank service fees linked to parent expenses, assets, or loans. Journal Entry:

Kind: BANK_CHARGE
Date: Expense date
Parent: Main expense/asset/loan entry

Dr BANK_CHARGE_EXPENSE   Amount
   Cr CASH (Bank Account)  Amount

Example:

Pay supplier 200,000 RWF + 2,000 RWF bank charge

Entry 1 - Main Expense:
Dr OPERATING_EXPENSE (Supplies)  200,000
   Cr CASH (Operations)          200,000

Entry 2 - Bank Charge:
Dr BANK_CHARGE_EXPENSE   2,000
   Cr CASH (Operations)  2,000

Total cash decrease: 202,000 RWF

Automatic linking: Bank charges are separate entries linked to parent via parentExpenseId When to use: Transaction fees, wire transfer fees, check fees, account maintenance charges

Expense Information

Each expense record includes:

Required Fields

Amount:

How much was spent (minimum 0.01)
Must match organization’s currency decimal places
Validates against monetary policy

Title:

Short description of what was purchased
Example: “Office rent - June 2026”, “Stationery supplies”, “Treasurer stipend”
Required, non-empty string

Date:

When the expense occurred (ISO date format)
Can be historical (past dates allowed)
Cannot be in closed accounting period
Cannot exceed current date

Optional Fields

Description:

Detailed explanation of the expense
Purpose, justification, or additional context
Example: “Monthly rent for office space at Kimihurura, Period: June 2026”

Bank Account:

Which account paid the expense
Falls back to default account if not specified
Must be active account

Documents:

Supporting receipts, invoices, or reference documents
Stored as JSON array of DocumentItemDto
Includes document type, URL, and metadata

Reserve Allocation:

For reserve-funded expenses only
Selects which reserve fund to draw from
Must have sufficient reserve balance

Bank Charge Amount:

Additional bank service charge (optional)
Automatically creates linked BANK_CHARGE entry
Included in total reserve release if reserve-funded

Skip Negative Balance Check:

Advanced option to allow negative balances
Requires special permission
Use only for opening balance adjustments

Automatically Generated

Expense ID: Unique identifier (UUID) Journal Entry ID: Links to accounting entry Organization ID: Scope to organization Created At: Timestamp of creation Parent IDs: Links to parent expense/asset/loan (for bank charges)

Common Expense Categories

Most tontines track these types of expenses:

Category	Examples	Typical Amount
Operating Expenses	Rent, utilities, internet, phone	Medium to High
Salaries & Wages	Treasurer pay, accountant fees, staff salaries	High
Office Supplies	Paper, pens, ledgers, printer ink	Low
Bank Charges	Account maintenance fees, transaction fees, wire fees	Low
Meeting Expenses	Room rental, refreshments, member gatherings	Medium
Transportation	Treasurer travel, bank trips, member visits	Low to Medium
Professional Services	Audit fees, legal consultation, training, software	Medium to High
Communication	SMS notifications, printing, postage	Low
Technology	Software subscriptions, computer equipment	Medium
Maintenance & Repairs	Office repairs, equipment maintenance	Medium
Insurance	Office insurance, liability coverage	Medium
Other	Miscellaneous expenses	Varies

Category best practices:

Use consistent category names across all expenses
Create organization-specific categories as needed
Don’t include loan disbursements, dividends, or asset purchases as expenses
Separate capital expenditures (buy assets) from operational expenses

Learn more about expense categories →

What’s NOT an Expense?

These operations are not expenses and should be tracked separately: ❌ Loan Disbursements: Track as loans, not expenses ❌ Dividend Distributions: Track as dividends, not expenses ❌ Member Savings Withdrawals: Track as savings withdrawals ❌ Reserve Allocations: Track as reserve top-ups (separate feature) ❌ Asset Purchases: Track as fixed assets ❌ Bank Transfers: Move money between accounts (internal, not expense) ❌ Opening Balance Adjustments: Use dedicated adjustment feature

Expense Operations

What You Can Do

Record Expenses

Create new expense entries

View History

Browse and search past expenses

Edit Expenses

Update expense details

Delete Expenses

Remove expense entries

How Editing Works

Reverse-and-Repost Pattern:

System doesn’t modify existing entries
Instead, reverses old entry and creates new one
Maintains complete audit trail
All linked entries (bank charges, reserve releases) also reversed and recreated

What you can change:

Amount
Title
Description
Date
Bank account
Reserve allocation
Bank charge amount

Constraints:

Cannot edit expenses in closed accounting periods
Cannot edit reversed expenses
Must have expenses:write permission

How Deletion Works

Reversal Process:

Reverses main expense entry
Reverses all linked bank charges
Reverses linked reserve release (if reserve-funded)
Updates bank account balances back to original state

Constraints:

Cannot delete expenses in closed accounting periods
May create negative balance (check before deleting)
Requires expenses:write permission

Integration with Other Features

Bank Accounts

Expenses decrease bank account balances through CASH ledger credits. How it works:

You select which bank account pays the expense
System creates journal entry crediting CASH (bank account)
Bank account balance decreases automatically
Transaction appears in bank account history

Best practice: Always select the correct bank account to match where money actually came from. Learn about bank accounts →

Reserves

Reserve-funded expenses draw from designated reserve allocations. How it works:

Select reserve allocation when recording expense
System releases funds from reserve (Dr CASH, Cr RESERVE_ALLOCATION)
System records expense (Dr EXPENSE, Cr CASH)
Reserve balance decreases, expense recorded, bank unchanged

Benefits:

Track which expenses came from reserves
Prevent overspending reserve allocations
Better reserve fund reporting
Separate restricted from unrestricted spending

Example use cases:

Emergency equipment repair from Emergency Fund
Audit fees from Statutory Reserve
Training expenses from Development Fund

Learn about reserves →

Financial Reports

Expenses appear on Profit & Loss (Income Statement). Impact on P&L:

Revenue:
  Interest Income                 500,000
  Entry Fees                       50,000
Total Revenue:                    550,000

Expenses:
  Operating Expenses             (200,000)
  Salaries                       (100,000)
  Bank Charges                    (10,000)
  Professional Services           (50,000)
Total Expenses:                  (360,000)

Net Income:                       190,000

What this means:

Higher expenses = lower net income
Net income affects dividends available
Expense trends show operational efficiency

Learn about P&L reports →

General Ledger

All expenses create journal entries in the general ledger. Every expense:

Creates at least one journal entry (may create 2-3 if reserve-funded with bank charge)
Debits OPERATING_EXPENSE or BANK_CHARGE_EXPENSE
Credits CASH (bank account)
Maintains balanced double-entry accounting

Audit trail:

Every entry records who, when, what, why
Reversals are tracked separately (not deleted)
Complete history maintained permanently

Learn about the general ledger →

Validation and Constraints

Input Validation

Amount:

✅ Must be at least 0.01
✅ Must match organization’s currency decimal places (e.g., 2 decimals for RWF)
❌ Cannot be negative
❌ Cannot be zero

Title:

✅ Must be non-empty string
❌ Cannot be blank

Date:

✅ Must be valid ISO date
✅ Can be historical (past dates)
❌ Cannot be in closed accounting period
❌ Cannot exceed current date

Bank Account:

✅ Must be active account
✅ Falls back to default if not specified
❌ Cannot use inactive accounts

Reserve Allocation (if provided):

✅ Must exist and be active
✅ Must have sufficient balance
❌ Cannot exceed reserve balance

Business Logic Validation

Balance Checks:

System verifies bank account won’t go negative (unless explicitly skipped)
Checks reserve balance before releasing funds
Validates total amount against available cash

Accounting Period:

Cannot create expense in closed period
Cannot edit expense in closed period
Cannot delete expense in closed period

Idempotency:

All operations require idempotency key
Prevents duplicate entries from retries
Safe for network failures and refreshes

Permissions Required

Action	Permission	Scope
View expenses	`expenses:read`	ANY
Create expense	`expenses:write`	ANY
Edit expense	`expenses:write`	ANY
Delete expense	`expenses:write`	ANY
View financial reports	`reports:read`	ANY

Typical roles: Accountants and Administrators usually have expenses:write. Regular members typically have expenses:read (view only) or no access.

Best Practices

Expense management tips:

Record expenses promptly (same day or within a week)
Keep physical receipts and upload as documents
Use clear, consistent titles (include month/period)
Add detailed descriptions for large or unusual expenses
Always select the correct bank account
Use reserve-funded expenses for emergency/planned spending from reserves
Separate bank charges from main expenses (use bank charge field)
Review expense reports monthly
Set spending limits and get approval for large purchases
Don’t use expenses for loan disbursements or asset purchases
Reconcile bank statements to catch missing expenses
Close accounting periods regularly to lock historical data

Common Scenarios

Scenario 1: Regular Monthly Rent

Amount: 50,000 RWF
Title: "Office Rent - June 2026"
Date: 2026-06-01
Bank Account: Operations Current Account
Description: "Monthly office space rental at Kimihurura"

Result:
Dr OPERATING_EXPENSE (Rent)     50,000
   Cr CASH (Operations)         50,000

Bank Balance: Decreased by 50,000 RWF

Scenario 2: Bank Wire Transfer with Fee

Amount: 200,000 RWF
Title: "Payment to Supplier XYZ"
Date: 2026-06-05
Bank Account: Operations Current Account
Bank Charge Amount: 3,000 RWF
Description: "Purchase order #123 - Office supplies"

Result (2 entries):
Entry 1:
Dr OPERATING_EXPENSE (Supplies)  200,000
   Cr CASH (Operations)          200,000

Entry 2 (Auto-linked):
Dr BANK_CHARGE_EXPENSE  3,000
   Cr CASH (Operations)  3,000

Total Bank Decrease: 203,000 RWF

Scenario 3: Emergency Repair from Reserve

Amount: 100,000 RWF
Title: "Equipment Repair - Emergency"
Date: 2026-06-10
Reserve Allocation: Emergency Fund
Bank Account: Operations Current Account
Description: "Broken printer repair - urgent"

Result (2 entries):
Entry 1 - Reserve Release:
Dr CASH (Operations)                100,000
   Cr RESERVE_ALLOCATION (Emergency)  100,000

Entry 2 - Expense:
Dr OPERATING_EXPENSE (Repairs)  100,000
   Cr CASH (Operations)         100,000

Reserve Balance: Decreased by 100,000 RWF
Bank Balance: Unchanged (released then spent)

Getting Started

Record Your First Expense

Step-by-step expense recording guide

Expense Categories

Organize spending by category

View Expense History

Browse and analyze past spending

Profit & Loss Report

See expense impact on profitability

​What are Expenses?

​Why Track Expenses?

​How Expenses Work

​Types of Expenses

​1. Standard Operating Expenses

​2. Reserve-Funded Expenses

​3. Bank Charges

​Expense Information

​Required Fields

​Optional Fields

​Automatically Generated

​Common Expense Categories

​What’s NOT an Expense?

​Expense Operations

​What You Can Do

Record Expenses

View History

Edit Expenses

Delete Expenses

​How Editing Works

​How Deletion Works

​Integration with Other Features

​Bank Accounts

​Reserves

​Financial Reports

​General Ledger

​Validation and Constraints

​Input Validation

​Business Logic Validation

​Permissions Required

​Best Practices

​Common Scenarios

​Scenario 1: Regular Monthly Rent

​Scenario 2: Bank Wire Transfer with Fee

​Scenario 3: Emergency Repair from Reserve

​Getting Started

Record Your First Expense

Expense Categories

View Expense History

Profit & Loss Report

What are Expenses?

Why Track Expenses?

How Expenses Work

Types of Expenses

1. Standard Operating Expenses

2. Reserve-Funded Expenses

3. Bank Charges

Expense Information

Required Fields

Optional Fields

Automatically Generated

Common Expense Categories

What’s NOT an Expense?

Expense Operations

What You Can Do

How Editing Works

How Deletion Works

Integration with Other Features

Bank Accounts

Reserves

Financial Reports

General Ledger

Validation and Constraints

Input Validation

Business Logic Validation

Permissions Required

Best Practices

Common Scenarios

Scenario 1: Regular Monthly Rent

Scenario 2: Bank Wire Transfer with Fee

Scenario 3: Emergency Repair from Reserve

Getting Started