How to stay on top of expenses claims at work – and avoid being left out of pocket
Expenses blunders can leave employees frustrated and feeling the pinch financially. Here’s what you need to know.
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Putting in claims for work-related expenses is a necessary chore for many employees – but new research reveals that the process can leave some workers feeling frustrated and out of pocket.
Employees tend to expense between £100 and £500 per month, the survey for payments technology company Caxton found.
For many, that money came out of their own pockets. In fact, 41% of the employees surveyed said they’d normally make business-related purchases with their own personal credit or debit card, and 12% use their own cash. Meanwhile, one in three (30%) use a corporate credit or debit card.
The wait to be reimbursed can have an impact on employees’ own financial wellbeing, with one in three saying it can take up to a month for the expenses claim to land back into their bank account.
Three-quarters (75%) of the employees polled say they would ditch paying out of their own pocket for work expenses, if given the choice.
The research, which quizzed 1,000 employees and 500 managers across the UK, also revealed some “grey areas” when it comes to making claims.
Nine in 10 employees say their business has an official expenses policy – leaving some perhaps guessing over what is and isn’t allowed when it comes to claiming expenses.
Whether due to an unclear or non-existent policy or perhaps another reason, nearly a third (29%) of the employees polled say they have made a business-related purchase and expensed the cost without getting approval beforehand.
This could potentially lead to them being left out of pocket if a claim for reimbursement is rejected.
In addition, one in seven (13%) in the survey admit to claiming business expenses for purchases that were not work-related.
Deliberately misusing company money could potentially lead to someone landing themselves in big trouble with their employer – as well as the prospect of facing police action.
Alana Parsons, chief operating officer at Caxton, which provides tools for businesses and people to move money, says the survey findings indicate “employees want a smarter, automated expense system that gives them flexibility and benefits without the hassle”.
To help prevent big mistakes with your expenses when putting in a claim, Parsons shares the following tips…
1. First things first, read your expenses policy
“Before making any work-related purchases, take some time to review your company’s expenses policy to understand what’s covered and how to document expenses,” says Parsons.
Although some employers may not have an official policy in place, there are still things employees – and bosses – can do to avoid misunderstandings and disputes further down the line.
Parsons says: “If there’s no policy, request written guidelines for clarity. Being familiar with these rules can help you avoid mistakes, ensure smooth claims and reduce the risk of delays or disputes.”
And if you’re ever unsure about whether to make a particular purchase, Parsons says it’s best to double-check beforehand and get approval in writing, whether by email or text. By keeping a written record, you can point to it at a later date if any issues crop up.
2. Manage your cash flow
“If you’re frequently using personal funds for business expenses, it can put a strain on your finances, especially if reimbursements are delayed,” says Parsons. “Consider having an open and honest conversation with your employer, and you could suggest exploring other options like company cards or pre-paid expense cards to lessen the burden.
“If you’re repeatedly not repaid promptly for large expenses, it’s reasonable to push back on using your own card.”
There may be some circumstances where it’s worth suggesting to the employer that they foot the bill up-front.
If lots of employees need to buy the same items, some employers may actually find that it works out cheaper for them to purchase their own equipment in bulk and supply it to staff, rather than workers buying it themselves.
3. Use your own funds wisely
“If you need to use your own card for business expenses, opt for a credit card that gives you bonuses and rewards,” suggests Parsons. “This way, you get extra protections and can earn points or cashback on purchases.”
Some employees may find the costs really ramp up when they’re going on work trips overseas. Parsons adds: “When making purchases abroad, it’s important to consider the different fees you may be charged and weigh out your options.”
Some employees may want to consider a pre-paid travel card, for example.
4. Don’t save work card details on personal services
“If you’ve ever bought something with a work card in a personal online shopping account, don’t save the card details to your account and risk accidental personal expenditure on a work card later on, for example when a subscription auto renews,” cautions Parsons.
5. Suggest going digital
If there is lots of physical paperwork to fill out, Parsons says employees could suggest their firm tries switching to digital tools to make the process more streamlined. “In the meantime, keep a digital record of your expenses and make it a habit to take photos of your receipts.”
One more thing…
In addition to Parsons’ tips, making sure you submit your expenses in a timely way is also vital.
Caxton’s research found that less than a quarter (23%) of employees say they always submit expenses as soon as possible. So make sure you check what your company’s cut-off period is for filing expense claims, and don’t leave those receipts piling up – as your employer may not take kindly to paying for purchases made months ago.