Understanding Expenses#

Open Collective provides the tools to submit and pay expenses, right on the platform itself.

It is important that all expenses contain complete and valid information that meets all the Fiscal Host’s legal requirements. So we’ve built a process that ensures that all parties sign them off before they are processed and paid.

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Expenses submitted through Open Collective must be approved first by the Collective admins before they can be paid. If your project is hosted by a Fiscal Host, they will pay the expense according to their terms and policies.
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This means that the expense submitter, the Collective, and the Fiscal host all have a role to play in helping expenses get paid effectively.

How an expense is paid#

The most straightforward version of this process looks like this:

1. The expense is submitted#

To begin, an expense submitter drafts and submits an expense. They may have written the expense themselves, or they may have been invited to submit an expense.

At this point, it passes onto the Collective for review.

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If you’re an expense submitter who wants to find out how to create and/or edit an expense, go to Expenses and Getting Paid
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2. The Collective reviews the expense#

The expense now becomes the responsibility of the Collective’s admins. They review it in the expenses section in their Dashboard, and decide whether it’s a valid expense.

They can:

• Approve the expense
• Reject it
• Ask the expense submitter to edit and resubmit

We advise Collectives to agree on guidelines for approving expenses and to set an expense policy, which will show up on the expense submission page. Collectives may have formal decision-making processes or may only pay expenses for specific things.

If the Collective admin approves the expense, the expense submitter will get notified, and it will then pass to the Fiscal Host.

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To find out more about reviewing an expense as a Collective admin, go to our Paying Expenses as a Collective section.
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3. The Fiscal Host reviews the expense#

If the project is hosted by a Fiscal Host they will carry out checks to make sure the expense meets their fiscal and legal requirements. This includes confirming that the expense meets their policies, that they have the correct information from the payee to file their accounts, etc.

If they are not satisfied, they can:

• Reject the expense outright
• Leave a comment explaining why
• Ask the expense submitter for clarification or more information
• Hold the expense while they work with the expense submitter and/or Collective to address issues with the expense

Otherwise, they will process the payment:

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If you are the admin of an Organization, you will also process payments.
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4. The expense is paid#

Once the expense has been approved by the collective admin and reviewed by a Fiscal Host admin (if hosted), it will be processed to be paid.

Sometimes, an error occurs during the payment process, or is flagged by the chosen third-party payment provider. In this situation, the payer (usually the Fiscal Host) can either try again or seek out necessary information from the expense submitter or the Collective.

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If you’re a Fiscal Host looking for information on how to pay an expense, go to our Paying Expenses as a Host section.
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