With a return to business (more or less) as usual for many UK companies, business travel is seeing an uptick once more – and with it, so too are business expenses. But expenses, if done wrong, can result in further expenses to your business. How best to control your business’ expense? Here are four suggestions for tracking your employees’ incurred business expenses.
Create an Expense Claim Form
Having a process by which to track expense claims from employees is crucial – there are a lot of moving parts to expenses, from collecting evidence and verifying expenditure to reimbursing funds – and if you don’t get it right as an employer, employees may feel as if they are spending their own money to benefit the business. As such, make it as easy as possible to submit an expense claim: create an easy-to-use form for employees, with spaces for amount spent, type of expense, and the employee responsible. This way, your accounting department can reconcile the expenses and reimburse the employee quickly and efficiently.
Have Employees Retain Receipts
It is vital that your business retains records and evidence of any expenses, in order to account for accurate reporting end-of-year. As such, you need receipts for every expense purchase, to prove the money was indeed spent on that particular expense. Ensure that your employees understand this, and retain receipts for every expense transaction; many expenditures will result in hard-copy receipts, which can result in issues if lost, while online expenditures produce virtual receipts which are far easier to track and archive.
Supply Your Employees with Prepaid Cards
If expenses are often incurred by certain employees in certain roles – for example, by regular business trips and client meetings – utilising a pre-paid card from an online banking platform can streamline the expenses process for all involved. By knowing roughly how much can be expected to be spent, you can load up a pre-paid card with company money, saving time and energy in reimbursing employees and allowing you to keep closer track of your business’ general expenses. You can also set limits on the card, to ensure expenses are only incurred in relevant places.
Ensure Your Employees Understand Expenses
“Expenses” does not purely mean “the company will cover this”. Recording expenses is important because expenses necessary to the business are subtracted from the its end-of-year profits, reducing the tax it is liable to pay in the process. These expenses are “tax-deductible”, and, as far as employee-incurred expenses are concerned, include necessities such as travel and stationery. Entertaining clients is a non tax-deductible expense, and is only seen as a beneficial expense owing to the potential business it may bring in. Making sure your employees understand what is and isn’t a valid expense will save you a significant amount money and administrative effort each year.