An expense claim is a document enabling a member of staff to be reimbursed for expenses incurred in the course of his or her work. Managing all these receipts represents a significant workload for both the employee and the employer. But there are a number of things that small businesses can do to lighten the load. Let's find out.
What expenses should be reimbursed?
Expenses include
- business meals
- accommodation: hotel, rental
- all travel expenses: train and plane tickets, tolls, parking, cabs, public transport, gasoline, etc.
- mileage expenses if the employee uses his or her own vehicle
- telephone accessories
- customer gifts
- professional clothing
- part of your personal rent, electricity consumption, internet and telephone subscription if you work from home
Generally speaking, all expenses incurred by a company director or employee on behalf of the company are eligible for reimbursement. However, these three essential conditions must be respected:
- expenses must be related to the company's activity
- expenses must be reimbursed to the nearest cent
- supporting documentation must be provided
Otherwise, in the event of a tax audit, the company will be penalized. The Urssaf could also reclassify illegitimate expenses as benefits in kind if abuses are found.
There are two ways of reimbursing business expenses. When the employee is reimbursed by the penny, these are actual expenses. If the company pays a fixed allowance, the expenses are reimbursed on a lump-sum basis. The latter method does not apply to executives, who must be reimbursed on an actual basis.
Managing expense accounts
The administrative department of a company is responsible for managing employee expense accounts. In small companies, this sometimes tedious task falls to the company manager.
Using the lump-sum system, which is useful when employee expenses are almost always the same, eliminates the need to manage expense reports. The employer systematically allocates a certain sum to cover all travel and meal expenses. The employee is free to use this amount, and it makes no difference whether he or she spends it in full or not. The amount is forfeited.
The same cannot be said for actual expenses, which are more complex to manage. However, there are effective ways of optimizing the management of these expenses.
Choosing the right software
Specialized software enables expense claims to be created and submitted via a smartphone. Using an application, the employee enters expenses immediately, takes photos of receipts and attaches them to the expense report. This eliminates the need to make mistakes or lose receipts.
For the employer, this means real-time visibility of employee expenses. As a result, they can better control their cash flow, plan their budget, approve certain items and reduce paperwork.
Everything is dematerialized, centralized and accelerated. This is obviously the best way to save time and increase efficiency.
Using the net
Using Dropbox, for example, or Google drive, receipts can be scanned, then stored by date at the time of travel. Employees can share all information with their managers.
This method facilitates archiving, but does not eliminate the risk of file mishandling. Those who use it need to master the cloud and possess high-performance IT tools.
Methodical filing
If your company has only a few employees and little travel, you don't need sophisticated software. All you need to do is adopta rigorous filing method. Receipts should be filed progressively, by date, in a different pocket each month. In each pocket, on a blank sheet of paper, the expense account clerk will write the amount of each bill, the date it was issued and the date it was reimbursed.
Today, it's more common to use a spreadsheet like Excel to enter this kind of data.
Provide a means of payment
The company can choose to give a "business" card to the employees closest to it. This business card is very simple to use. Employees use it instead of their personal bank card for business expenses related to a specific mission. There is, of course, an upper limit on consumption.
Whatever the card, it is linked to the company's account. Expenses appear on statements sent to both management and the employee. This improves control over operations.
By adopting this type of payment, the company automates the expense claim management process.
Budgeting
Expense management is not something to be taken lightly, especially when your company's activities require a lot of business travel or meetings.
Anticipating expenses is one of the rules to follow if you don't want to blow your budget and jeopardize your cash flow. Whenever possible, it's best to set a limit for each type of expense.
It's essential to define a good expense policy: impose ceilings, set a maximum time limit for providing receipts, and list everything that should be included in an expense report.