3 Must Haves for a Transparent Expense Report

3 Must Haves for a Transparent Expense Report

For many companies the travel expense report portrays a tedious additional task. However, with some basic knowledge in the field and the support of automated processes, accounting expenses can be done comfortably on the side.


1. Differentiating types of expenses

Travel expenses
Expenses can be claimed via invoices, receipts or internal receipts. This includes travel expenses, both with the car as well as different forms of public transport. When traveling with public transport, costs for the ticket and additional supplements must be handed in.
When employees choose to use their own car, most companies apply a mileage allowance of £45p per mile to reimburse employees for their expenses. However, this requires the employee to keep an exact driver’s logbook as well as to submit itemized receipts. A good digital expense management tool should automatically calculate his mileage allowance.

Ancillary travel expenses
Travel expenses include all sorts of additional, ‘hidden’ costs which are hard to account for before the trip starts. Some common examples of these costs can be extra luggage costs, business telephone costs, hotel internet fees, parking fees or even tips. In each case, a receipt of the expense is required to provide evidence of the costs incurred. Since these documents must be kept for 6 years, it is advisable to produce copies of those documents that can easily fade. As physical copies take up a lot of storage space, digital storage of the documents portrays a practical alternative in this case.
Ancillary costs tend to accumulate substantially during the course of every trip. Hence it is important for organizations to closely predict and manage these expenses. Online expense management services often allow companies to monitor and analyze the different types of expenses. Integrated data analytic tools can help identifying saving potentials.

Accommodation costs
Hotel costs can either be reimbursed in the actual amount, or as a fixed sum. How the costs will be reimbursed, is determined by the company policy. Additionally, many companies introduce a limitation for the overall costs per night.


2. Define individual policies for the expense management process

In addition to the standard company policies, organizations can make additional specifications per person or group. The details of the travel expense billing process can and should be determined by each company individually and are usually recorded in the company policy. This is important as the reimbursement of individual costs and fixed sums only applies as stipulated in the employment contract. For example, a lower mileage allowance may be applied, or a maximum amount may be determined for refundable business expenses. Expense management apps often allow for the respective company rules to be set individually, to ensure that they will be taken into account during the billing process.


3. Increase efficiency through automated processes

Especially with manual billing methods, there is a high susceptibility to error during the process. Failure to comply with company policies or incorrect billing of fixed rates can occur quickly due to the multiple steps involved in the workflow. As a result, costs are credited improperly. To avoid these traps, automated processes make billing more easy and intuitive. Right away, fixed rates and company rules are applied correctly, ensuring that additional work can be avoided.