An expense is an additional cost on top of your work. Typical expenses are travel, hotel, meetings, lunch, merchandise, apps used, external help etc.
When creating an expense you can set the date, add notes, associate it with a client and a project and set tags.
Tags are useful when filtering expenses, because you can get a list of expenses and their total based on those tags. You can manage them by clicking on your profile (bottom left corner) → Company Settings → Project Accounting → Expenses Tags.