have an Scan n cut machine, asking advice about how to cut applique pieces, Should I add the seam allowance the machine has a feature for or just cut the pieces larger to allow for seam allowance? Any advice would be much appreciated.

Add seam allowance only if you are doing needle turn or finished edge applique. If doing raw edge just cut the actual size. Don't forget to do a test cut because it is way easy to cut through the mat

First of all there are lots of tutorials on this on youtube. I would allow the seam allowance and you can even have the machine draw the seam allowance onto the fabric so there is no guess work involved. I love my Scan n Cut