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Isn't the expenses process a little outdated?

The whole idea of spend your own money and reclaim it seems old fashioned.

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I've had quite a few conversations recently about how expenses are done at present. Increasingly, the 'pay your own money and then reclaim it' paradigm is seen as an anachronism and, actually, a little exploitative.

There are now quite a few providers of prepaid business cards and things like cash advances to eliminate the expenses process. Obviously, these companies have a vested interest in changing how expenses are done -- but I have to say I'm convinced by their arguments. I'm out and about a lot as a journalist and being asked to essentially loan my company money is annoying. For sales people, I can imagine it's much worse. I spoke to someone at a large appliance manufacturer recently, and he talked about sales people racking up thousands in expenses each month.

For small businesses, I accept, an expenses solution might not be possible -- but for medium and larger businesses, what's holding you back? What's the argmument against moving away from the traditional process?

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By DJKL
26th Jun 2019 11:10

Stable door and horses would be my reservation, repaying expenses gives me control/leverage.

We did supply cash floats to our handymen but these were set so they owed us always the £300 and they submitted invoices to me which I reviewed and repaid (or not) to them re materials.

Staff in effect having carte blanche to spend on a card can cause issues, it is one thing to say " no, I am not reimbursing x re that receipt ", it is another again to say, "hey, you repay me that x you spent."

I have a company credit card in my name, I tend to use it sparingly, but even I make mistakes- a pizza oven I purchased on Amazon recently I used the wrong embedded card on my Amazon account, I though I used my personal card turns out I used my employer's in error and now owe them £65 (found out when C/card statement came in to the business) - on the plus side it does make decent pizzas.

Of course in my above example we also have the issue of "Quis custodiet ipsos custodes?" - I wonder, should I take it on holiday next week, probably not.

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26th Jun 2019 11:23

If people are paying themselves then reclaiming, i tend to find (as a rule), that they’re not quite as free & easy as if it’s not their money. Don’t get me wrong, if an e’ee of mine needs to spend some money, then that’s fine. I just don’t want them spending double or treble what they need to just because it’s coming off my e.g. charge card. Plus then there’s the issue of missing receipts ...

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26th Jun 2019 11:32

You're going to struggle to get folk to claim their 45p a mile on a prepaid credit card.

The cashless society might work OK when businesses are receiving money but it doesn't work for Joe Public.

Let's not forget that we were to abolish cheques in 2016 until the banks realised they hadn't got workable alternatives for a dozen or more scenarios.

We're a few decades away from the truly cashless society just now. I doubt if I will see it in my lifetime.

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By tom123
26th Jun 2019 11:40

I agree broadly with others - mind you we provide company credit cards, and I have the delight of getting the receipts in.

I have worked with portals (like Concur) which were quite good, as they devolved responsibility to users. Wouldn't quite suit the smaller company though.

I would be wary of "loaning" an employer more than I could lose, tbh.

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26th Jun 2019 11:55

Would it be fair to say that you're not imprest with the status quo Francois?

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By DJKL
to Vile Nortin Naipaan
26th Jun 2019 12:39

Bravo.

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to DJKL
26th Jun 2019 12:51

Glad you think I'm punny!

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to Vile Nortin Naipaan
01st Jul 2019 09:06

Haha good work!

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26th Jun 2019 13:18

Control.

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26th Jun 2019 13:37

I'm just grateful that reimbursed expenses don't have to be put on the P11D any more and reclaimed by the employee either on their tax return or some other way. I know most people didn't bother (including me) but at least we're not breaking the law now.

Can't really see the problem with monthly expense claims providing there are proper policies in place - if not it's tough luck on the employer.

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By DJKL
to thomas34
26th Jun 2019 14:15

Agreed. I have actually just finished our P11Ds this morning, only one actual return was needed and then did two that were mere confirmations none due. A lot simpler than previously.

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27th Jun 2019 08:59

Francois Badenhorst wrote:
Increasingly, the 'pay your own money and then reclaim it' paradigm is seen as an anachronism and, actually, a little exploitative.

No -it's being portrayed that way by businesses with a product to sell.

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….I'm out and about a lot as a journalist and being asked to essentially loan my company money is annoying.

Systems like Concur make the claim and reimbursement process quick and easy. If you pay on credit card, you can be in funds before your bill is due. Even a paper-based system can be quick.

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I spoke to someone [who] talked about sales people racking up thousands in expenses each month.

Sounds like they need to review their expenses policy.

Quote:
What's the argument against moving away from the traditional process?

Control and accountability. Without controls over expense claims, people start to become very free with the amounts they claim. Pay-and-reclaim keeps people honest.

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