Workflow Guide: Expense Management

Welcome to RootFi's Expense Management Workflow Guide, which helps Expense Management companies automate their customers' expense reconciliation with their respective accounting systems.

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Automation transforms how your expense management product handles your business customers’ expenses by simplifying the expense collection, verification and approval process. The challenge arises when you need to connect to different customers’ accounting platforms to automate expense reconciliation.

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Accounting integrations bridge the data gap between your product and your customers’ accounting systems. This workflow guide outlines the step-by-step process of using accounting integrations via RootFi's Unified Accounting API to develop an automated expense management product.

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What is the Expense Management Workflow?

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The expense management workflow involves several steps that can benefit from automation:

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1. Expense Logging: Capture and log expense data from employees.
2. Verification: Validate expenses against company policies.
3. Reconciliation: Match expenses with transactions in accounting systems.
4. Approval and Reimbursement: Approve valid expenses for payment.

The integration with accounting systems is crucial for streamlining these processes, particularly the reconciliation and reimbursement steps.

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The Need for Accounting Integrations and RootFi's Unified Accounting API

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While accounting integrations are the key to unlocking sync between your product and your customers’ accounting software, building and maintaining multiple integrations in-house is time-consuming, expensive and resource-intensive.

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Related: Use our API cost calculator to estimate the cost of building integrations in-house.

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RootFi's Unified API offers a more efficient approach, as it allows you to leverage one API to integrate with multiple accounting platforms. There are many benefits with a Unified API:

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• Global Connectivity: Simplifies integration with multiple accounting platforms, ensuring maximum coverage for current and future customers.
• Accelerated Go-to-Market: Integrating with one Unified API significantly cuts down the time required to build, test and launch an integrated product.
• Cost Savings: Lowers the overall cost of developing and maintaining integrations, allowing resources to focus on core product development.
• Maintenance Ease: Offloads integration maintenance responsibilities, allowing your team to focus on core product enhancement.

Partnering with RootFi can accelerate your time to market and also enhances your product's value to your customers, thereby increasing customer satisfaction, product appeal and revenue potential.

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How to Build an Automated Expense Management Solution with a Unified Accounting API

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This step-by-step guide can help expense management companies use RootFi’s Unified Accounting API to automate their customers' expense reconciliation with their respective accounting systems.

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This workflow can be used for the following types of accounts:

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• Pre-Paid Cards
• Credit Cards
• Debit Cards

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You can handle all of the common workflows required to offer an expense management product to your customers with RootFi’s Unified API. Here is a quick summary of all the steps involved:

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1. (One Time Activity) Connect a customer's accounting systems with RootFi’s Authentication Flow.
2. (One Time Activity) Link or Create a Bank Account (Asset) for Pre-Paid Cards and Debit Cards or Credit Card Account (Liability).
3. (Recurring) Create Expenses with the Expense Data Model and link Contacts and Accounts to the respective expenses.
4. In some cases, like for Xero and Tally, you can use the Bills or Journal Entries Data Model as a proxy for expenses and follow the same steps as above.
5. (Recurring) Upload and attach Documents to respective expenses with Documents.
6. (Recurring) Mark credit card re-payments with Journal Entries.
7. (Recurring) Add or withdraw funds for a pre-paid account or bank account with Journal Entries.
8. (Recurring) Mark an employee reimbursement with the Bills, Contacts and Bill Payment Data Models.

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Set up an Automated Expense Management Workflow with Accounting Integrations (Step-by-step Guide)

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Step 1 (One-Time Activity): Connect with your customers’ accounting platform

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RootFi provides two convenient options to connect with your customers’s accounting platform:

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1. Use RootFi’s Invite Link, a convenient and secure URL, or
2. Embed RootFi’s Connect SDK into your application

The Invite Link requires no code to use, making it suitable to get started without a developer. You can customize and white-label this onboarding process with RootFi’s Connect SDK, allowing authentication to occur natively in your product.

Either way, your customers will be guided through a simple authorization flow to connect their respective accounting platforms to your product.

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Learn more about how to offer your customers a seamless onboarding process for data authorization.

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1. Use our Dashboard or APIs to connect a customer’s accounting platform
2. Use the POST/Invite-Link API.
3. Name your customers’ company.
4. A unique company_id will be generated once your customer completes the authentication flow. This company_id will be used to read and write data to their accounting platform.

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Step 2 (One-Time Activity): Link or Create your customer’s credit card or bank account

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Every expense transaction must have an Account as a source of funds that is credited.

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For Pre-Paid Cards/ Debit Cards: This is a Bank Account with a category = ‘Bank.’

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1. Use GET/bank_accounts APIs to get the Bank_Account ID if the account already exists in the customer's accounting platform.

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OR

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2. Use POST/bank_accounts APIs to create a bank account and get the Bank_Account ID.

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For Credit Cards/ Debit Cards: This is an Account with a category = ‘Liability.’

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1. Use the GET/accounts APIs to get the Account ID if the account already exists in the customer's accounting platform.

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OR

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2. Use the POST/accounts APIs to create an Account and get the Account ID.

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Step 3 (Recurring): Create Expenses

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Generally, you can use the POST/expenses API to create expenses.

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If Expenses are unavailable for a particular accounting platform like Xero and Tally, please use the POST/bills API or POST/journal_entries API.

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Here are some essential points to note:

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1. Credit Account - the account from which the funds are being drawn. Please look at Step 2 above for more information.
2. Vendor - Vendor is the employee linked to the expense. Use the GET/Contacts and POST/Contacts APIs and filter on type= ‘vendor’. Please note a contact ID is required to post an expense or Bill, so if the employee in question does not already exist on the accounting platform, you will first have to create a new vendor using the POST/Contacts API.
3. Expense Account or Debited Account- You can push multiple line items (Usually just 1) when pushing an expense. Each line item will have an expense account associated (category = ‘Expense’). The GET/accounts API lets you fetch all accounts, and you can filter the account type by category: expense through Postman or GraphQL.

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Step 4 (Recurring): Upload Documents

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One of the core benefits of an expense management platform is the facility to link proof of an expense in the form of a receipt or PDF. Use the POST/ documents API to upload and attach from a customer’s employee to a file to an expense, invoice, or bill.

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Step 5 (Recurring): Record a Credit Card Repayment

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Use the POST/ journal_entries API to reflect a credit card repayment.

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1. Credited Account: This will be the bank account used to make the repayment.
2. Contact: In this case, it will be the expense management company (your company).
3. Debited Account:  This will be the credit card liability account.

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Step 6 (Recurring): Process Bank Account Withdrawals or Top Ups for Pre-Paid Cards

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Use the POST/ journal_entries API to reflect withdrawals and top-ups for a bank account/prepaid card.

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1. Credited Account: This will be the bank account used to make the top-up.
2. Debited Account:  This will be the account being topped up (Pre-paid asset or bank account)

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Step 7 (Recurring): Process Employee Reimbursement Requests and Payments

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Employee reimbursement requests and reimbursement payments are reflected in the accounting system in the form of Bills and Bill Payments.

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1. To log a reimbursement request, use the POST/ bills API to create a bill containing the reimbursement amount.
2. Use the POST/Contacts APIs (filter on type= ‘vendor’) to create a specific vendor per employee you link to the Bill.
3. Once the reimbursement is approved and the payment is made. Use the POST/bill_payments API to log a payment against the requested reimbursement.

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Learn how to build an automated expense management product

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The seven steps above explain how to manage the most common actions of an expense management product with RootFi’s accounting integrations. If have more questions or would like to build an automated expense management product with RootFi’s Unified APIs, we’d love to help you get started. Speak to our integration experts today!

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