Most employees have to submit expense reports at some point — be it for out-of-town travel, client dinners, special events, or other expenses you incur due to your job responsibilities. Keeping track of these expenses is important, otherwise you’re losing money while on the job and probably not endearing yourself to your company’s finance department, which relies on accurate records and timely reports from employees.
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?
Source: getrichslowly.org