I mean, I get it - in some cases. It’s low-level fraud protection. But I travel for work a lot, and my travel plans are always very public and well known to my manager.
In my particular case, I’m feeling like - jeez, what a waste of time. I spent literally 2 hours of work time filling out my last expense report. This was a laptop bag full of receipts, taping them to copy paper to scan and email, each one having to go online and fill out “reason” and “date”. It was 33 scanned pages after the smoke cleared.
I mean, my boss knows I was in Galveston, TX for a trade show for X number of days in November. Is it really that important that I have to scan a receipt for a coffee from Starbucks during that time-frame?
Are there tax benefits to this bother? Or is my company just making me waste time? Just wondering what corporations do with these expense reports.
Yep. Tax deductions for business expenses have to have support documentation. Last I heard, the IRS still requires a receipt for anything over $5, hence all the scanning of them.
As opposed to what? Just letting you just expense whatever you want?
Corporations have you fill out expense reports for the same reason they do everything. It’s to keep a record a bit more robust than your manager’s memory so they can track and manage expenses.
The corporate card typically doesn’t track which client or project those expenses are allocated to.
I’m not in accounting nor finance but the way I hear those guys talk about general ledger accounts makes me realize that they’re important. Who better to sort the receipts into their proper bins than the person who generated them? I hear you on the pain in the ass though - to the point for me where I just buy my own breakfasts, coffees, and lunches when I’m on the road.
We didn’t have corporate cards, but the person I replaced at my current job was fired for trying to falsify a travel expense report. So avoiding employee theft is one reason.
When I travel I get a per diem for meals and expenses. If I want to eat at McDonalds and pocket the extra, so be it. I’ve traveled in previous jobs where every single receipt was required, and it’s a colossal waste of time after you get back to have to sort through everything. With a meal per diem all I need to worry about is my hotel, rental car, gasoline, and airline ticket. I can fire off an expense report in an hour, max. I think this is better for everyone involved and saves hours of productivity for at least 3 people.
This would be my guess. It isn’t the same thing but once a tree owned by the town fell on my car and did a handful of tiny dents. The procedure they wanted me to do to get reimbursed for any repairs was to fill out so many forms they were bound in a small book. Clearly it was to discourage people from bothering and in my case it worked.
My company uses Expensify and I love it with all my heart. Emailed receipts? Forward to receipts@expensify.com. Paper receipts? Snap a pic with your cell phone and press a button. The app OCRs all the information and creates the expenses for you. Every trip I do requires maybe 10-20 minutes of twiddling bits in the Expensify report, and then I send it off.
I’ve worked jobs where I had to maintain piles of original paper receipts and fill out monster Excel templates from Hell. I do not look back on it fondly.
In addition, there are different amounts you can deduct for some items, particularly meals. If you’re entertaining clients you deduct a different percentage than if you’re eating alone on a business trip or bringing in food for people working late to meet a deadline.
Yes, it’s primarily about the taxes, and secondarily about company costs. As a company they can write off business expenses within certain categories, up to certain amounts.
If they are re-imbursing you for expenses, they need the backup in case of an audit. And this is for your protection too. If they are re-imbursing you they need to prove that the payment is for expenses and not compensation - else they, and you, would have to pay taxes on it just like your regular pay.
If you want the details from a tax law perspective, you want to look up the requirements for an “accountable plan” for reimbursements. There are reams of tax law about this - the IRS just recently released about 250 pages of updates to clarify that many of the shadier practices in the reimbursement world are not valid accountable plans.
Basically, the IRS requires that companies have documentation from the employee that establishes the amount of the expense and the business purpose for the expense. The company then must pay the amount documented and the employee must agree to repay to the company any excess reimbursement.
If a company doesn’t see this documentation, then they are required by law to include the reimbursement as part of your gross pay, making it subject to FICA tax and to income tax. Many employees don’t even realize this - if they have $500/month “travel allowance” from their employer, they just paid 7.6% in FICA tax and perhaps 15 or 25% in income tax on that $500 allowance.
If your company allows it, ours lets you snap a pic of the receipt and either print them out when you file, or upload them to the expense report server.
Easier than carrying them around and taping them to paper…