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How to control employee expenses

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16th Jun 2015
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Keeping a reign on expenses can be a difficult, often Quixotic mission. There are some tips and tricks you can stick to, though, to make life a little easier.

As Rebecca Benneyworth mentioned on AccountingWEB recently, companies “are all looking to cut overhead” and keeping a tighter leash on expenses is a critical part of penny pinching.

It’s great timing then that Concur have compiled their top tips for keeping a lid on employee expenses.

  • Make sure you can enforce your expenses policy

As a general rule, employees would like to follow company policies – but sometimes it’s difficult to do.

Only around one-third of UK organisations have a rigorously applied corporate expense policy. Even where a policy exists, less than half of these organisations check claims against the policy.

Employees will often read the policy when they first join an organisation, or when you update the policy. But employees will often submit whatever they can and managers approve expenses if they seem reasonable – whether they are policy or not.

This leaves the finance team with the time consuming and unpopular task of policing policy and pushing back. Implementing an automated solution with your expense policy built in helps to flag out of policy spend. This ensures that employees understand what they can claim and saves the finance team a lot of work.  

  • Mileage needs to be accurate

Mileage is often the single largest expense category with sales, consultants and engineers travelling by car to many different locations.

Not only is mileage difficult to track to ensure correct reimbursement, but it is also one of the most fiddled expenses. A YouGov survey found that 25% of employees admitted to padding their expenses at one time or another and 65% of them say they hid that under mileage.

Many employees consider calculating the exact mileage a waste of time, often making it a nice round number. But because of this, it is often the first thing that draws HMRC’s eager gaze.

Many companies also forget how much VAT they can claim back on the fuel element of mileage reimbursed to employees. It’s quite complex to calculate, though, and therefore many companies leave money on the table as they are unable to comply with some of the detail in the regulation.

  • Receipts – what are they good for?

Whether they are lost, or only a credit card slip is attached, capturing receipts can be the most laborious chore as capturing the correct VAT receipt is a prerequisite for HMRC compliance.

The best way to deal with a problem is probably to eliminate it. With most employees using smart phones for both work and social, the easiest way to do this is using an app that enables them to take a picture of the receipt at the point of spend.

The information on the receipt can then be zipped online with minimum fuss, eliminating the need for a paper receipt altogether. A clear digital image is accepted by HMRC.

For other content produced by Concur, check out their supplier hub on AccountingWEB

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