How To Manage Your Company Expenses
For those of us of a certain age, an expense account is synonymous with a friendly media owner inviting you for lunch at Roka. This involved ordering nearly everything off the menu and being too full of to eat anything else when the robata finally arrived. Lunch usually finished at about 4 which meant there was no point going back to work. So the rest of the day was spent imbibing raspberry mojitos only stopping in time to make the last tube. Or much, much later if somebody’s company was willing to stump up for an Uber. Which was usually the case.
In these times of austerity expense accounts in most sectors aren’t nearly as generous. But many employees still have to cover business expenses of the more mundane kind.
If you work at a large company this is not usually a problem. They will have systems in place to manage expenses such as a digital platform for booking hotels and train tickets. And if you have to entertain clients you will probably be given a corporate credit card.
However, if you work at a startup you may be expected to cover expenses yourself before being reimbursed by your employer at a later date. If you do a lot of travelling or have to make one off payments for things like events, these can quickly add up.
Check your company policy
Before you spend any money on behalf of your company read the company policy on expenses. You should be able to find this in your company handbook or you can ask HR for a copy.
This will outline what expenses you are allowed to claim and if there are certain limits. For example, you may only be able to book standard class travel tickets and there may be a cap on how much you can pay for a hotel room.
HMRC sets guidance for the amount that can be paid for meals, usually called subsistence in official documents, which is currently £10 for breakfast and £25 for dinner. Your employer may choose to pay more but if you spend over the limit then you will have to cover the amount yourself.
The policy should also cover other expenses such as business phone calls, taxis, mileage allowance, corporate gifts, and late-night travel. If you are unsure about anything always ask your line manager before you pay for an expense, so you can be certain you will get it back.
Use a separate credit card
If you use your regular credit card or debit card to pay for company expenses, it can be difficult to keep track of them, so keep business expenses separate from your day-to-day living expenses by using a separate credit card. This should also help you manage your money better as you can clearly see what you really have left to spend on yourself when looking at the balances of your accounts.
If you use a credit card with a long interest free period it means you won’t need to pay it off until you have been reimbursed from your company. This can sometimes be a month or more so using a credit card in this way means you won’t be out of pocket. If you’ve never been happy with using credit for your own use, this is also a good way to start building up your credit history.
Choose a credit card that offers points or cashback to earn a bit of extra cash. It’s a bit cheeky but your employer will never know. Think of it as a little reward for all the extra paperwork you’ve had to do.
You can find the best credit deals on the market at online comparison sites such as MoneySupermarket or CompareTheMarket.
Take advantage of cashback sites
Using cashback sites for small purchases sometimes isn’t worth the hassle. But if you’re regularly buying expensive travel tickets or booking hotels then you should join Quidco and make your purchases through them. Quidco pay up to 3% cashback on train tickets and even more on hotels, and they regularly run offers and competitions to win cash bonuses.
Alternatively, you could join Nectar which offers points on many online purchases. These can be spent at Sainsbury’s, eBay, or Argos, or redeemed for online vouchers for cinema tickets and days out. Nectar also partners with some train companies including Virgin and South Western Railway so you can earn bonus points when booking. Just 3 London to Manchester train journeys with Virgin can earn you £10 worth of Nectar points.
Keep records and receipts
Make sure you keep all receipts even after you have filed your expenses. You will need itemized VAT receipts; credit card statements will not do for audit purposes.
Some companies use apps to help you submit your expenses; you simply take a photo of the receipts using your phone and upload them via the app. Other companies may still expect you to do it the old-fashioned way of photocopying your receipts and filling out forms.
Until you have been paid do not get rid of any your receipts in case you need to query something. Again, having a separate credit card for expenses will help you easily check that you have been reimbursed the right amount of money.
Ask for help
If you think that you are being asked to cover too many expenses and you feel overwhelmed talk to your manager or HR. Businesses can often get corporate discounts so it may be better for your company to buy tickets and book hotels direct or use a travel management platform, which will save them money in the long run. We also feel it is unfair for junior members of staff to cover large expenses and instead, managers should be taking the responsibility.
At a startup if things start to go wrong there is the risk that you may never be reimbursed for expenses you have paid for. By asking your company to cover their own expense you mitigate that risk.