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Bear-skin rugs and chicken statues? Expensive expense report faux pas

When it comes to business expense reporting, common sense doesn’t always apply.

What do a pogo stick, Super Bowl tickets, and an octopus have in common? They’re all expense report items employees have submitted for reimbursement.

Even if, like most workers, you don’t enjoy having to save receipts, fill out expense reports, and wait for reimbursement from your employer, you’ve still got a leg up over these workers and their outlandish expenses.

According to a new Robert Half Management Resources survey, 56 percent of CFOs reported an increase in inappropriate expense report requests in the last three years. While there are occasions when an unusual reimbursement request may be warranted, employees need to realize submissions that display a lapse in judgment can have broader implications for their career and company.

“Some of the more absurd expense report submissions may seem laughable, but they can be an expensive problem for businesses,” says Tim Hird, an executive vice president with Robert Half. “Companies must have effective review systems, policies, and processes in place, or they risk losses in profits and employee productivity.”

Additional research also found most companies utilize technology-based solutions in their expense-reporting process: 44 percent use internally developed software and 41 percent employ third-party systems. Overall, only 14 percent of organizations use manual processes, though this jumps to 31 for firms with 20 to 49 employees.

Hird added that implementing new technology can help streamline the expense-reporting process, but communication to staff is essential. “Do everything possible to make sure there is no ambiguity among employees about what constitutes a valid business expense. Regularly share your policies and include examples of past tricky situations to clarify gray areas.”

Robert Half Management Resources offers managers three ways to address and reduce inappropriate expense report submissions:

  1. Overcommunicate guidelines. Make company policy easily accessible and provide regular reminders through the employee newsletter, company intranet, or staff email.
  2. Discuss expense report issues with employees. Improper submissions may be the result of staff members’ lapse in judgment or attempt to push boundaries. Whatever the reason, follow up with employees so that mistakes can be avoided in the future.
  3. Review new requests carefully. Keep an eye on future submissions when a significant problem has occurred. If you spot a red flag, address it immediately and reinforce company policies.

For employees charged with tracking and reporting their expenses, Jim Jeffers, metro market manager of Robert Half in Madison, offers some additional advice.

Before submitting expenses for review, says Jeffers, ask yourself the following:

  1. Is it within the company policy? When preparing an expense report, review your organization’s guidelines. If you have questions, check with your manager or human resources representative. Taking a few minutes at the outset can spare the embarrassment of an inappropriate request.
  2. Could there be any confusion? Clear any request that could be interpreted as a personal expense with your manager beforehand. If your boss doesn’t know the baseball tickets you bought were to entertain a client, for example, you could unnecessarily put yourself in hot water.
  3. Would your family approve? Got an item that’s on the border of being inappropriate? Think about what your family might say. If you’d be embarrassed to talk to a parent or grandparent about something, reconsider trying to expense it.

“Inappropriate expense reports are costly, both to the company’s bottom line and to the careers of the people who submit them,” notes Jeffers. “Careless expense reporting can damage your credibility and, ultimately, your professional reputation. If your manager can’t trust you to submit reasonable expense reports, they might not be able to trust you when it comes to other important projects.”

Notably, Jeffers says submitting questionable expenses can impact an employee’s ability to participate in career-enhancing opportunities that would have otherwise positioned him or her in a positive light.

For instance, you could potentially get passed up for an assignment that involves business travel if your employer thinks you can’t report your expenses properly. Not to mention, it wastes the time of the company’s accounting employees who must scrutinize every expense report for unusual items. Particularly if you work in accounting and finance, submitting a questionable expense report will inevitably have people second-guessing whether you should be working with money, adds Jeffers.

Jeffers’ personal favorite examples of ridiculous expenses includes workers who tried to expense a statue of a chicken with a top hat, a Lamborghini, and a cow.

It’s certainly not unusual for employees to accrue extraordinary or non-recurring expenses over the course of a business trip, for example. But there’s a right way for workers to submit a reimbursement request for unusual but justified expenses.

“Employees may have items their managers don’t immediately view as business expenses,” explains Jeffers. “The onus is on workers to get approval from their manager before purchasing the item. For example, if you’re treating a top client to a fancy meal that will be more expensive than your company’s dinner allowance, get permission first from your manager so you can ensure the expense will be approved. Communication is key.”

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