Expense reimbursement is a company practice wherein employees are reimbursed for the expenses they have incurred while performing their duty as an employee to the company. This is common if your job includes interacting with clients or possible clients as well as travelling as part of your job. Though each company has different policies in terms of what qualifies as expenses that can be reimbursed and what are not, these expenses listed below are usually included:
- Meals – meal expenses incurred alone or with clients or potential clients are included as long as the company expected you to dine with the client as art of the process.
- Transportation – Flights and ground transportation to and fro the destination should be included in the company expenses.
- Lodging – If the business trip is expected to last more than a day, the company must pay for your hotel or lodging accommodation.
- Incidental expenses – these expenses includes tips and other fees to personal service employees incurred during the duration of the trip.
It is worth knowing what is in your employees’ handbook says regarding other services that are included and can reimbursed by your company. For example, some companies include clients’ entertainment in company expenses. Laundry services, gym membership and other expenses may also be considered company expenses for prolonged business trips. Some companies put a limit in terms of amount that can be spent for these extra activities and others do not. Thus, reading and making sure you are following company policies is vital.
Filing for Expense Reimbursement via Expense Reimbursement Report
It is a standard practice for companies to ask for any form of receipt when an employee is filling out an expense reimbursement report. Expenses must be itemized with the supporting evidence of a receipt in a form of bill or via your credit card statement. For other expenses like incidental expenses, wherein you paid in cash, you must also itemize those. Some expenses may also need some clarification or justification. Nowadays, companies usually give out company credit cards to senior employees to lessen the hassle of filling out an expense reimbursement report. This way, they won’t have to be reimbursed since the company will be the one to pay the bills.
If you have more questions about expense reimbursement, feel free to ask for a free consultation here.
A completely filled out expense reimbursement report is submitted to the company’s accounting department and will then be reviewed to make sure that there are no false claims, unnecessary and/or over spending the company’s money. If the accounting department finds errors, gross misappropriation of company funds, you can be sued or fired or both depending on company policies. For those who have company credit cards, they won’t have to file unless they had expenses that were paid in cash. The company’s credit card statement will be a sufficient replacement but the credit card bill will be reviewed as well for any expenses that should not have been charged to the company’s name in the first place. Some companies also set deadlines for filling out an expense reimbursement report and failing to file before the set deadline might result to no reimbursement. Again, it is helpful to know company policies regarding this matter.