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Employees don’t understand their firm’s expenses policy

Employees don’t understand their firm’s expenses policy

The majority of companies do have an expenses policy in place, but apparently employees do not know how to interpret it properly.

Research by Concur, the travel and expense company, found that £9.85 out of every £100 spent on expenses last year was outside that firm’s expenses policy. Staying at non-preferred hotels and flying business class for short distances are prime examples of instances where company policy was ignored.

Contractor accountants may like to keep an eye out for examples of this as only 1.2% of expense submissions were rejected as outwith company policy last year.

David Vine, one of Concur’s senior directors said that companies do understand that it is important to have an expenses policy in place but some of them are having problems making sure it is understood and implemented correctly.

Last year companies spent £692 million on expenses that should have been rejected. However, 95% of VAT recoverable expenses were backed up with a valid receipt in 2011; in 2010 the figure was 89%, so there has been some improvement.

Employers have been focusing on persuading employees to back up their mileage claims with a valid VAT receipt, and to a certain extent it is working. 74% of mileage claims submitted last year were backed up by a VAT receipt; up from just 59% the year before. However, this does mean that a valid receipt is missing in 26% of cases.

Mr Vine finished off by saying that the VAT increase in January last year has encouraged firms to make sure expenses are covered by valid VAT receipts but mileage is still a problem child.

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Image: Money Box by LoopZilla

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