Taking care of business: Expense reimbursement
It seems straightforward enough to track your expenses, but I’ve personally known employees who have lost receipts and didn’t get reimbursed, failed to get reimbursed because they didn’t understand that an expense was reimbursable, or missed the deadline to turn in the paperwork. In all three cases, the employee paid for a company expense with their own money. Not good at all! The situation can easily be avoided with some basic steps to make sure company expenses don’t affect your bottom line.
Know the Policies
Request a copy of your company’s expense reimbursement policy, and make sure you understand the guidelines about the following:
- Methods of payment. Can you use a company credit card? If not, will you pay out of your own pocket, or can you request a cash advance?
- Reimbursable expenses. What are the allowable expenses? Typically these are transportation, mileage, meals, lodging, etc. What are the allowable limits? You’ll probably have a certain amount you can spend on meals each day, for example.
- Non-reimbursable expenses. Know what isn’t covered by the company. For example, most companies will pay for meals, but not alcoholic beverages.
- Documentation. Do you need to submit receipts? What about tracking mileage? Know what documentation you’ll need to accompany your expense report paperwork.
- Filing deadlines. How soon must you submit your paperwork to get reimbursed?
Finally, print out a copy of the expense reimbursement form so that you have a clear understanding of what you’ll need to complete it. If something doesn’t make sense about the form or the policies, now is the time to ask for clarification from your boss.
Tip: Leave the form on your office chair to remind yourself to fill it out as soon as you’re back at your desk.
The Envelope Method
Let’s say you are going out-of-town to work at a company event. A simple, low-tech way to organize yourself is with a plain business envelope. Here’s how it works:
- If you received a cash advance, place the cash inside the envelope.
- If you need to track mileage, draw a mileage box on the outside of the envelope with a column for the date, starting mileage, and ending mileage.
- Draw another box for tips, with a column for the date, amount, and the reason for giving the tip. This is for incidentals that might not have a receipt, like a housekeeping tip of $5 or tipping the hotel staff for moving heavy items.
- When you receive a receipt for a business expense, mark which items you’ll submit for reimbursement (for example, a fajita meal, but not the margarita). Also write down the purpose of the expense, such as paying for a round of golf for a client and business partner, and the tip amount. Usually dates print out on the receipt, but if it’s not on there, write that down, as well.
- Place all receipts in the envelope.
It sounds simplistic, but every time I’ve done this, I’ve found it easier to get my expense report turned in on time. When I don’t do it, I have to hunt down receipts in bags, pants pockets, and purses, then figure out where that $5 went that I forgot I used to tip hotel staff.
Don’t Wait to File
File your expenses the day you return to the office. To be honest, I don’t always do this. But it’s the best way to ensure that you’ll remember any details you might not have written down and that you’ll get your paperwork turned in before the deadline. There are tax laws and company policies about reimbursements, so don’t wait and risk losing receipts or forgetting about submitting them until it’s too late.
I’m going to take my own advice and complete my expense reimbursement form from a business trip last week before I can even think about procrastinating! In the meantime, let’s hear about your own methods for tracking reimbursable expenses. What are your tips for keeping business expenses organized?
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There are 53 comments to "Taking care of business: Expense reimbursement".
I inherited this tip from my mother, a veteran business traveller, and I’ll be darned if it doesn’t work.
Bring your expense form with you on your trip, and fill it out when you’re on the long plan ride home. You’re usually wired, you have time, and then you can submit it with your envelope of receipts as soon as you get back.
It makes life so much simpler! The last thing I want to do when I get home is sift through all those receipts- this way I utilize my otherwise useless “captive time”.
I incur over $2000 every week in expenses – here are my tips (oriented to high volume not once in a blue moon expenses):
a.) Keep a dedicated credit card and checking account where your reimbursements are deposited – don’t use them for anything else except expenses. The balance of the checking account should always trend up. If it seems low, you are likely missing some reimbursement.
b.) Have a system, any system, that forces you to submit expenses on time. I for one, have a habit of doing expenses every Friday before heading home for the weekend. Its a ritual that I rarely forget. I also have an outlook reminder in my calendar.
c.) Do sense checking of your expenses. You don’t need to account for every penny every day, but when you submit expenses or get reimbursed do some quick math in your head whether you missed some big ticket item (e.g. forgot to take the hotel receipt at check-out). Develop a feel for what amount should be and then investigate discrepancies
d.) Write explanations on receipts. Often receipts are bland and have cryptic info at best – which is difficult to explain to accounting 3 weeks later. Just take a pen and write on the back of the receipt what the purpose was: “Sales dinner with Joe Smith”
When I traveled on business, the following were very useful for keeping my sanity.
– Business travel revolves around the credit card. Avoid paying cash whenever possible for work expenses because it’s hard to track. Also, this creates a backup record in case your receipts are lost or misplaced. On my best week ever, I left with $2 in my wallet and returned a week later with the same $2 in my wallet.
– Have one credit card for business purposes only. All work expenses go on this card. If possible, get a rewards card that has rewards which are useful to you.
– Set up direct deposit of expense checks.
– If you travel extensively, set up a separate checking account for keeping up with expenses. Have expense reimbursements sent there, and regular paychecks sent to another account.
– Update the expense report as frequently as you can. I used to have to submit ones based on a spreadsheet, so I would just keep a copy of that on my computer’s desktop and update it at a minimum daily.
– Sign up with the rewards systems for all of the airlines, rental car companies and so on. If possible, fly on the same airline and use the same car rental company. This will help you accrue rewards and upgrades more quickly.
Other, non-financial stuff:
– Learn to pack light. Packing lots of unnecessary stuff not only weighs you down, but the more stuff you carry with you, the more stuff you have to lose.
– Consider having a “work wardrobe”, full of clothes that travel well with minimal maintenance.
– If last minute travel is a part of your job, leave a bag packed at all times. Depending on the nature of your work, you may just want to leave it in your car or office.
– If you have a very heavy travel job, consider living close to the airport rather than close to work.
– Be ready to get bumped, miss flights and be stuck in airports or in traffic. Committing to attend sports games, concerts or other expensive scheduled things should always be done with an eye to the travel schedule.
– Have fun where you go, but also realize that sometimes, going back to the hotel room and doing absolutely nothing is fine, too.
– Watch what you eat on the road, and consider taking up a kind of exercise that travels easily — running, yoga, Pilates and walking are all good examples.
I haven’t worked for a company that didn’t pay for alcoholic beverages.
I have a question about cash advance versus employer reimbursement.
I had thought that reimbursement is better because it doesn’t count as taxable income. I had heard that a cash advance can count as taxable income (and then one has to utilize the complicated tax rules for business credits/deductions).
Could someone let me know if this is correct? Does a cash advance have different tax implications than an employer reimbursement?
~Dan
Ouch! This touches a bit of a nerve, because I’ve been known to totally forget to take care of expense receipts. It’s no fun to be paying your employer’s bills instead of having them pay you.
My simple tips:
* Know the rules.
* Be comfortable with the process (ask if you need to).
* Save the receipts (I love the envelope method).
* Mark the receipts (or a photocopy of them), consistently, (a) when you submit them, and (b) when you get paid.
Remember, the person in charge of reimbursing you is human, too. So don’t stop tracking after you’ve submitted the report. Instead pay attention to make sure everything gets paid. If something isn’t, ask why.
I travel extensively for business and instead of an envelope, I use a plastic, two pocket folder for keeping receipts instead. You can find them at an office supply store for around $2-3. In one pocket (which has a flap to fully close over the pocket) I put only meal receipts. In the other pocket I keep all other receipts, such as hotel, tolls, parking, etc. I also keep a sheet of paper where I track all of my cash expenses and mileage.
Jake’s habit of filing expenses every Friday is one I highly endorse and use myself. In fact I enter expenses in a certain order (mileage, tolls, parking, hotel, meals then tips) just so I don’t forget anything.
Here’s some other tips:
– Use a credit card to pay for as much as possible in regards to business expenses. There are a few occasions that I was unable to find a receipt, but a copy of my Visa statement had enough detail to get reimbursed for that item.
– Every night when you return to the hotel, put all of your receipts into the folder or envelope. Write down any cash expenditures (e.g. tips) that you do not have a receipt for.
– Get a receipt for everything you can! Co-workers laugh that I get a receipt for a $3 toll, but it helps me to remember the expense. If you pay in cash and tip, make sure to write down the tip amount on the receipt too. Also write down the names of anyone you bought food or drinks for on the receipt.
– If you’re trying to eat healthy and your company expense policy allows it, get some healthy snacks (granola, dried fruit, etc.) at a grocery store while traveling. Pack a few healthy snacks with you every day in your briefcase or backpack, If you occasionally miss breakfast or lunch due to meeting schedules, this is also a great way to get something decent to eat until you can have a real meal.
– If you drive, bring a small personal cooler with you to keep drinks and fruits nice and cold. If you’re on a per diem, this is a great way to buy cheaply and then eat and drink at your leisure. There’s nothing more refreshing than an ice cold drink in the middle of nowhere!
– Unless you have to buy them due to carry-on luggage restrictions, avoid buying trial size toiletries as their cost per unit is usually much higher!
– Always carry some cash on you as certain places do not accept credit cards. As a rule I normally carry $60-100 to avoid excessive ATM fees when I can’t use my Visa.
– If you travel internationally, be aware that many credit cards charge a 1-3% fee for currency conversion. Make sure you expense this as it can easily add up to $40 or more dollars a trip.
– Consider using a backpack for carrying your laptop instead of a breifcase as it leaves an extra hand free and is more comfortable when using for an extended period of time. Whichever you choose, invest in a high quality one as the cheap ones are uncomfortable and do not last long.
Great tips – both in the post and the comments. I’ll add one and reinforce another.
– if you pay expenses for a group of people (either clients or a group of people from work), write down the *names* of everyone who participated as well as the purpose of the expense *right on the receipt*. If you make it a practice of doing this every time, you will never have to explain or try to remember what that large expense was for.
– mileage can be a money maker, esp. if you have a fuel efficient and reliable car. So make sure to track and submit every mile that is NOT commuting mileage (can’t deduct commuting mileage), including department activities or special meetings, supply runs, driving to client’s offices or any place that is not your main office (so branch office visits can be included in mileage reimbursement requests)
Wow, you guys have some great advice! Sounds like many of you travel a lot more, and a lot farther, than I do.
@Jason–RE: alcoholic beverages–Apparently I’ve been working for the wrong companies!
I do use an envelope for reciepts, but my main method of tracking business expenses is just to use a designated credit card for everything on business trips.
Even if I lose a reciept, my firm will accept a printout of the transaction from the card website. Because our reimbursement is quite quick, using the card also allows me to float the expenses and not have to worry about cash or checking account balances.
I always submit expenses the day I return. Once its a habit it becomes second nature. Also don’t let yourself put receipts away. Keep them front and center on your desk so they bug you.
I bought a $2 tiny notebook that I keep in a suit pocket to write down what I spend as I spend it. In the evening I transfer the entries into my budget spreadsheet. That way once I’m back in the office I know exactly which receipt is for what. I actually give a printout to my assistant so he can double check his work and mine.
@April — They wouldn’t pay for you to host a party in your hotel room, but if you got a beer in the airport bar or had some wine with a meal, it wasn’t a problem. If you were taking customers or clients out for a meal, the latitude was even greater.
Yes, one of the main reasons I have a credit card is for business travel – so I’m not loaning the company money while I wait for reimbursement. I don’t normally use credit cards for anything in my day to day life except business travel. When my reimbursement check comes in I pay off the credit card in full (normally get check within a week of submission) since I don’t normally have other expenses on my credit card this works well for me.
For day to day travel. I submit my receipts the same day so they don’t get lost or misplaced and I submit for everything. I just got a check for a $1.50. Many of my work peers never submit milage for less than 10 miles or a $1 for parking, etc. but over the course of a month those expenses add up. You are just throwing money away if you don’t submit these small expenses. My assistant also knows to submit my receipts within two days if at all possible. I deposit checks on the weekend. I keep the system moving so I’m normally reimbursed within a week.
Agree with others, I try to write the subject of the receipt when I’m paying. So before I leave the dinner, I write the topic, client, names on the receipt.
@ Dan – this might just be how my company does things, but I got an advance in my April 16th paycheck for a trip at the end of April (covering my hotel and per diem) and it was simply labeled ‘Employee Reimbursement’ the same way they label my mileage/receipt reimbursements, and it was not taxed.
I do the stuff receipts in pockets and wallets thing. It actually isn’t so bad because there’s only 3 places to look.
Re: alcohol… we have a separate account for that (some private donor thought drinking was important, I guess) so we’re required to get separate receipts. I never bother with that because it is a hassle (so I just don’t drink at business meals).
Re: itemized receipts at group meals… we often need to get several copies, so we let the wait person know ahead of time we’ll need extra copies. Sometimes we tell them we’ll tip extra, and then we do.
I never understand the people who put reimbursements off until they can’t remember anything. It takes long enough to get the money after they’re submitted that I’d like to get the process started as early as possible.
Rather than an envelope I use a set of folders, one for each planned trip, with all applicable reservation information. I have had more than one coworker stuck when a reservation was mixed up and it’s valuable to have the record with you since it’s often hard, if not impossible, to get your electronic copy while on travel. Then as I get receipts I stick them back in the folder.
For the most part we only have to submit receipts for hotel, car, and plane. Any expense under $75 is reported, but we don’t need to present proof. This is where it can save a lot of headache if you know your company’s policy. On the flip side everything is electronic and the finance people don’t want to deal with receipts, so the receipts we have we are responsible to keep for years and we are subject to audit at any time.
It is also valuable to note that frequent traveler programs will often also keep receipts of your recent charges, so if a receipt is lost or destroyed you can print a replacement.
As another poster recommended, I pay for every meal I can with my credit card. As I said above, I don’t need those receipts so it’s easy to just pull up my statement when I get home and copy it (we get true cost for meals, not per diem). A lot less hassle than trying to keep track of a 1.5″x4″ piece of paper.
And finally, I would recommend whatever your method to be conscious of how you store receipts. This is true of any record keeping, not just travel. Many places these days use heat activated paper. That means if you leave it on your dash, or sometimes even in your pocket, it will fade or disappear.
I’m really happy to see an article about this. I’m the controller for my company and having to hear a sob story about an employee losing a reciept or why they turned in their report months late drives me up the wall. Getting things done on time helps you out and helps the company out.
On pre-planed expenses I fill out the form before I order the item. In many companies getting reimbursed is much easier than making a purchase. For example if I need a reference book, or a new set of optical filters. When you do it in conjunction with the purchase it streamlines the process and keeps you from getting lazy and forgetful.
As to the alcohol – my employer has created a policy that doesn’t allow it either. I punish them by always ordering an appetizer now, whether I want it or not.
@Jason
Companies (in Canada) are starting to trend towards not reimbursing alcohol. However, it can depend on whether it is marketing or travelling on the client’s money. I am a consultant and when I travel all my expsense get billed to our client. More and more of those clients are not reimbursing alcohol. Usually what I do is ask for any alcohol to come on a separate recepit.
I also tend to do my expense claims on the day I travel home. We have an electronic claim form so I have everything filled in and all I have to do is fix the recipts to something and then I can lodge it.
I would (like others) recommned putting work expenses on a credit card. I only have one (both personal and work) but as I pay it off every month it hasn’t been an issue yet.
Whether the receipts are in your wallet, envelope, whatever the big thing is just being consistent about keeping the receipts and filing claims. I am just too cheap to be willing to give my company my own money to do work for them.
Regardless of company policy, I try to document my expenses accurately. Guess it comes from having been in my own consulting business. Then, my expense reports were reviewed by my CFO (wife) for completeness and my accountant for IRS rules. None of us wanted to catch that falling knife. The need for accurate information was critical to properly price my bid for the work. Under-estimate the cost is like a pay cut. Over-estimate and you may be not get the work.
IMHO everyone should regard themselves as as the CEO of “You, Ink”. Even if you “have a job”! (A mistaken meme — you don’t “have” anything!) You’re selling your time and expertise. The only difference between you and a consultant is that the consultant has choices that you as an employee do not. And a job is only as secure as the last cleared paycheck.
YMMV
ha! if our company didn’t reimburse alcohol our sales guys would be broke all the time. They do a lot of work in the far east where people drink A LOT and it’s just not cool not to.
I’m on the opposite side of this – I work as a legal secretary, so I have NO reimbursable business expenses. My bosses, however, do. One of them is very good about turning over her receipts with who-what-where-why noted. The other one has not quite got the hang of it. 🙂
In my field, it’s essential to have billing information noted on the receipts or on a log that comes with them, so we know if the expense is billable to a client or not.
Make “may I have a receipt please” a part of your everyday vocabulary.
I’d also suggest taking camera phone pics of anything you might want to remind yourself about later. I click one of the places I went on business to remind myself of the expenses incurred at each place…a little story of my trip so I don’t forget an expense along the way. This is obviously only necessary if you are forgetful (like me) or stingy (like me) or anal (like me), lol.
All receipts and documentation are placed in the outer pocket of my briefcase so it’s all in one place when I get back home.
Another one that seems obvious is, Don’t try to do your company any favors.
I work for a non-profit that is always struggling with state budget cuts and donor revenue drops. Some of my coworkers don’t expense their miles to try to “help.” Sadly, it’s usually the people who can barely afford to pay their rent that do this.
Another friend of mine works for a firm that pays for meals and cabs when they work late into the night. He never expenses anything, thinking it will endear him somehow to the higher-ups. I seriously doubt if they’ve ever noticed that he pays for his own meals and takes the bus home at 3am.
It doesn’t seem like much, but a lot of months my expenses are around 10% on top of my take home pay. On a bad (working late) month, my hub’s expenses can be 25% on top of take home pay. You don’t want to be paying all of that out of pocket!
First and foremost rule of company travel is never use your own money for business tavel.
Either get a cash advance in the amount well more than the cost of the trip or use a company credit card. I use the former because I rather use my credit card and get the points and use the cash advance to pay the expenses incurred on the trip. If there are any delays in the reimbursement for travel expenses, you have the cash advance to pay for the expenses incurred on your credit card.
As far as keeping track of expenses, I do hold on to all my receipts while on travel for reimbursement purposes and keeping track of my daily spending.
How many of you are allowed a per diem, rather than expensing each invidivual meals?
My company allows per diem with the rate depending on the cost of living in a partiular city. What ever you don’t get to spend, you pocket. Some cities have an über high per diem rate for no reason and you end up banking money while on travel especially if you’re working long days.
I really like your articles April, they’re very well written, and they seem something that an average person can do. =)
Tip: Getting receipts is only half of what’s necessary when you’re traveling to a country where they don’t speak English. If all your receipts are printed in German, you’re going to have a tough time filling out your expense report if you didn’t take notes at the time you made your purchases.
On the flip side, the person reviewing your expense report probably doesn’t speak German either, so they’re probably not going to try and dispute any of your claims.
I can also expense up to two alcoholic beverages with a business dinner, which is nice, especially in Germany, where all beverages are beer.
I travel extensively for work and keep a dedicated points earning credit card for business expenses and try not to use cash, if possible.
One issue I still have problems with is the lag time between reimbursement from the company for expenses incurred and the time I need to pay the balance of my credit card. At my company, we book all our travel, and it’s often critical to book flights at least two weeks ahead of time in order to ensure getting a seat and getting a relatively affordable economy fare flight. Add another week for the business trip itself, a quick submission of the expenses, and then usually a 2 week turnaround time for an expense check to be issued, then depositing the check and waiting a day or two for it to clear and have the payment transfer over and well, i’m butting up against or going past that due date pretty quickly. Most cards that offer points have the highest rates of interest so if a balance isn’t paid in full by the payment due date, I incur interest costs of 19%. Due to lack of monitoring on my part, I probably ended up paying out over $1,000 in interest annually for a number of years because of not paying the balance in full on time.
I’ve tried talking to my company about a quicker turnaround time on expenses but have been told that a 30-day turnaround time is usually the standard. Is this true?
My solution, to at least minimize my out-of-pocket interest charges, has been to open up a dedicated line of credit with my bank, at a much lower 3.5% rate, which I pay my credit card out of each month. I then apply expense cheques directly to the loc. Wondering if there’s a better way or if others have experienced this situation?
One happy note: I can expense alcohol, though I would never expense anything more than a glass of wine or beer with dinner.
I travel frequently (80-90%) for work. I’m required to put flight, hotel and rental cars on my company credit card, but anything else (meals etc) goes on my personal card for the cash back. I’m required to keep receipts for anything over $75, which is pretty much only the 3 items listed above, all of which the various airline or hotel email me after my trip anyway. Every 2 weeks I submit my expense report, tell the company how much to pay on my corporate card and the rest goes to me. I email a PDF of my voucher to an automated system which instantly tells me if my reimbursement has been selected for audit If it’s audited I forward the email receipt from the airline or hotel to the auditor and I’m done, I get my money within 2 days. Even after paying off my personal credit card, I would say in a typical year I boost my pay by 20-25% from mileage and per diem reimbursements, all of which is tax free.
@28 Kyliep
Reimbursements are a reason I have a pretty sizeable emergency fund in savings. 30 days is a minimum for us.
So my solution: save up a bigger buffer in your savings account. You won’t be getting much interest, but you also won’t be losing 19% from your credit card. One nice thing is that you only have to (cut your spending and) save up that money once– it will come back once you get reimbursed.
My husband travels about a week a month averaged over the year. He collects his receipts in ziplock in his computer bag and pays for everything he can on his company CC.
His costs are all billed back to the client he was visiting (to audit). He is required to bill the per diem for meals regardless of the actual costs. He is also required to bill the miscellaneous per diem of $17. An average 5 day trip means about $150 “profit” for us.
Everything goes on the company CC, he normally completes his online expense form the last night at the hotel and at home adds any odd expense incurred at airports on the way home. The expense check is issued about a week later and the moment it is deposited I pay off the amount due to the CC, and the excess gets added to the weekly contribution to retirement accounts or extra mortgage payments. It never gets spent, with the exception of the $50 annual fee we pay to have the corporate AMEX card earn airline mileage. That fee is covered by the first $50 of excess reimbursement each year. We earn enough for at least one flight to Europe every year.
His travel has a definite impact on our finances. Not only do we make that $150/wk, but he isn’t consuming groceries at home and his car sits parked all week which probably saves us another $100/wk.
My situation isn’t a business… it’s a church. My husband is the youth minister, although it’s strictly a voluntary position. There is no church credit card, so we have a personal credit card we use just for church expenses. I have a particular section of my purse where I stick all youth-related receipts. And my other method is to hound my husband until he hands me his receipts. 😉
Thankfully, everything is quite casual. I just hand in receipts and note on them what they’re for. The financial secretary then takes it from whatever part of the youth budget it fits and reimburses us. It’s an easy process. Sometimes, though, it’s hard to remember to turn them in when I’m at church. My attention is usually pulled in so many different directions, and turning in receipts isn’t one of them.
@30 Nicole
Good to know that 30 days is standard and yes, am working on that emergency fund for a number of reasons, this being one of them!! 🙂 Thanks!
@33 I work in education though. It can take a semester to get reimbursed depending on what else admin is doing. Other kinds of business may be more efficient.
To Rach @16.
I am so there with you!
I work in the evil accounts department that force you to submit correct and legible receipts and all I ask is that you make your handwriting legible and don’t try to claim the outfitting of your house as a ‘business expense’. LOL.
People tend to think, oh it’s only one claim, it doesn’t matter, but we processed over 16,000 claims in this financial year and if everyone has bad handwriting and no receipts imagine how hard it is for my staff and I????
Enough complaining from the other side of the equation!
S
PS, just to give you an idea of how quickly we process though, if you get your paperwork to us, we guarantee to pay you within three working days!
For those of you volunteering/working for a not-for-profit, if you are considering not filing for all your expenses, file!!! Most not-for-profits, all in my experience, would rather reimburse you and have you donate the money back. Why? The reimbursements come from grants or dedicated funds, your donation is unrestricted.
A tip for those who receive per diem from their employers: if the per diem rate you receive for a trip is less than the official U.S. government per diem rate for that location, you may be able to deduct the difference as an unreimbursed employee expense on your federal income tax return.
My DH travels internationally for his job, and his employer pays below the per diem rates listed on the State Department’s web site — sometimes FAR below. The first year we found out about this opportunity, he ended up getting a $3000 deduction on our tax return, solely from the difference between the actual per diem he was paid and the published per diem rates for the cities where he traveled.
Ok, here are my secret tips on how to make sure you don’t end up going out of pocket when taking a business trips and perhaps tip the balance ever so slightly in your favor.
1. You will find those invaluable generic receipts at the bottom of the meal receipt given to you. Usually it’s cardstock paper where the itemized list is printed out and there is a perforated small slip you can tear off (1/4″ by 2″) that says Thank you and has a line for the total amount. Tear these off and these can be used for when you have missing receipts or meals you need to account for. These are invaluable and I normally keep them whenever I encounter them for later use.
2. As earlier stated, know the maximum amount you can claim without a receipt. I often miss meals or pack a personal granola bar / power bar for breakfast or lunch, so you can still get a little money back for this expense.
3. Don’t forget to claim mileage.
4. Sometimes restaurant receipts don’t list the tip you’ve given especially if you give it in cash, you need to annotate the receipt to note the tip given.
5. This is unethical and / or fraudulent but I’ve seen people buy the lowest cost airline ticket and then expense the fully refundable fare based on buying that ticket last minute and then refunding it prior to travel. This would only work with a personal credit card. If you wish to do this, use caution.
6. When you do your expense reports look at it from an auditor perspective and make sure the numbers all add up, have explanations and seem to be fair and reasonable. I’ve had employees that do stupid things like if the maximum amount of reimbursement without a receipt is $20, they will write $20 each meal. Basically they kill the golden goose as the policy gets changed as it’s unreasonable. If they were less greedy and wrote $17.56, $12.34, $19.75 for the same line items they would have been fine.
Similarly I had an employee expense some really dubious items like a shirt, cigarettes, adult movies (as written on a hotel receipt) and cigarettes. That type of stupidity could get you fired.
-Jeff
I’ve been through a number of expenses systems, and usually used them for work-related trips abroad.
It’s really important to know what the rules are before you go. If (as with one of my employers), there are fixed upper limits to what you can claim for each type of meal (breakfast/lunch/dinner), you may have to factor that in when ordering, or you may have to be aware of a relevant per diem rate. One of my employers had an additional “per diem” of about £5 a day for some countries that didn’t have to be accounted for (i.e. could cover tips and other things that didn’t give receipts). It was expected that you would claim this for every day, whether you used it or not, and was seen mostly as a kind of reimbursement for the inconvenience of being sent away from home.
I use something similar to the envelope system, although what I usually do is designate a pocket in my wallet for the purpose. It’s useful to pay at least 1 item by card if you’re abroad, because then you have a verified exchange rate to use on the form.
Lastly, I photocopy or scan the form and receipts before sending it in. That way, I’ve got proof if anything gets lost, and I can file the copy in the same way as a card receipt, ensuring that I check that it had been paid when I reconcile my bank statements.
April – great job exploring the nexus between personal finance and business expenses, I believe it’s a timely and fresh topic for the PF blogosphere. I used to support an executive who was incredibly efficient with his receipts; they were a beauty to behold. He always noted which meal a receipt was (i.e., Breakfast/Lunch/Dinner) and who he was with. He could readily recall details from business trips taken weeks ago.
I have also heard horror stories of sales reps that rarely turned in receipts, their company card was revoked and they incurred personal liability on the late and over the limit fees – it was unnecessary and a little pathetic. The rep still had to entertain clients, and had to pay for everything personally and wait for cash reimbursement. He lost a lot of money. Even if all the receipts were hastily stuffed in an envelope, that would have been a great start. He was often 3-4months behind, the company flags expenses more than 90 days behind. What was even more sad is that the company I used to work for had a pretty good technologically advanced system – all company credit card purchases where automatically fed into the software.
Cash tips (hotel porter, maid, baggage handler) can add up quickly. It’s so important to remember that.
Haven’t read the comments yet, but does anyone have to use SAP to submit their expenses?
Our company just switched to an SAP system, and it is so hard to use that it is a well known fact that people will just not submit smaller expenses to save themselves the frustration of having to deal with SAP.
True story!
@Jeff,
Another way to ensure that everything is covered is through cab receipts. I was taught early in my career to ask cabbies for extra receipts in any city you travel to. That way, if you end up spending out of pocket for something that’s not covered, you can claim it that way.
I would, however, never use such a system for anything but a truly work-related expense.
As a former accountant with a large company in the music and entertainment industry, I use to prepare the packets for reimbursement myself and then hand them out to employees traveling or meeting clients. Everything was there for them to fill out and return. It was a big help to try and be proactive from the company end. It made sure that all expenses were billed properly and in the correct quarter, as well as made me feel a bit better about making sure that everyone got reimbursed.
Suzanne,
You’ve got it. Way to cover your bases in the last sentence as well 🙂
Another trick I forgot to mention is my compnay will convert foreign transactions only based on a foreign exchange receipt. So I spend time seeking out the worst exchange rate, often at hotels or airports and then use that rate for all my overseas expenses. That avoids me being out of pocket as my credit card exchange rate is not good all the time!
-J
What a great post! My husband travels for work and usually forgets to get reciepts and to file the necessary expense report. He is trying this out on his next trip. Thanks for the tip!
Like chacha1@#22, I’m also in legal. Just as business travelers need to be reimbursed timely, clients need to be billed timely. And clients do examine their bills closely. I once saw a client question travel expenses on their monthly bill, for a month in which there were no activities requiring travel. Someone had delayed submitting his expenses for an earlier trip.
My company for some reason holds my expenses 60 days. I’m going broke supporting travel expenses and interest… Is this legal? Or Can I charge them interest? I think I might ask for advance next trip…
Hoping to get some clarification on my situation. My employer does not provide me with a company credit card and requires me to use my personal credit card or cash in order to pay for any expenses. The only real expenses that we get reimbursed are the supplies for where we’re at, mileage and per diem is straightforward. Anyways, so I purchased some supplies using my personal credit card and supplied the receipt as they requested. Now they are asking to see the statement from my personal credit card showing the expense in order to reconcile the expense. I have a feeling this isn’t legal for them to need to see my personal credit card statement, especially since they don’t pay the credit card bill directly. Any thoughts are welcomed.
I am lucky enough to have a corporate credit card.
I keep all receipts in an envelope. All non-food items like lodging, fuel, vehicle maintenance and office supplies are kept separate. I fill out my expense report as each receipt is received. This allows me to keep track of all daily food allowances.
It is always a bad idea to turn in a food receipt that includes an alcohol purchase. Have your server separate the order.
If you travel frequently to a specific location, negotiate a contract rate with the hotel. This will impress the bosses and will guarantee you logging even during heavy travel times, like a convention in your hotel.
Check in last. Get you dinner, shopping and appointments completed first. Remember, the hotel is contracted to reserve you a room. If you check in late, you get better rooms. You’re a guarantee. They can book everyone else then you get the last room. Tonight, I am in the honeymoon suite. Haha. I get a jacuzzi suite about 50% of the time by checking in late. People are cheap, and you are left with the nice rooms. Always communicate with the hotel lobby that you don’t care what room, you just want to sleep.
Those Employee Advance and total deduction should be posted in the check.
what would happen to an employee who uses his company credit card to pay for meals and hotels with an ex girlfriend, IF, now that they are broken up, she is vindictive and reports him? The company is a major US Silicon Valley tech company.
When my co. bank account was stopped then I expense all co. Expenditure from my personal account nowhow should I reconcile those
When I was travelling internationally, our company insisted on itemized expense reports complete with the receipt copy. Only problem was our international hotel did not have a fax machine!! I resorted to taking pictures of the receipts with my phone & submitted via email attachments. This snafu forced the action of moving toward the daily perdiem instead (something I was pushing for at the start of my assignment).