This thread has drifted quite a bit, but in any case, this is more or less what’s actually happening whenever a company moves to a more restrictive spending policy:
[ul]
[li]Upper management regularly reviews company spending as indicated by reports generated by the accounting department.[/li][li]Based on these reports, upper management decides to reduce operational expenditures and communicates this policy to the company.[/li][li]Department and middle management are responsible for implementing these directives, and do so by adjusting budget allocations and changing procedures.[/li][li]The managers responsible for selecting and approving the actual purchases need to adjust their practices. They could choose less expensive vendors, try to limit how much individual employees use, and so on.[/li][li]You ask your boss why you can’t have the nice pens or now have to keep receipts for everything and they say “damn accountants” instead of the real answer of “Our operational budget has been reduced and I’ve limited our supply ordering to help meet the new budget,” or maybe “There’s so much spending on reimbursements that can’t be linked back to genuine business needs, so we’re implementing new documentation requirements. Nothing personal.”[/li][/ul]
I think often times the accountants and others require receipts to protect themselves. This is a good thing, not just a cover-my-ass situation, because when fraud does occur (and all these posts show that it will happen) the accountants can show that procedures were followed. If the fraud still can’t be proven or tracked down, then that is a problem with the procedures, not the junior book keeper who approved the expenses. If accounting is so sloppy that people can get away with fraud, then how do you know the accountants aren’t in on it?
Relevant anecdote. A person where I work setup a shell company, and then purchased equipment through the shell company at inflated prices and kept the difference. Because the accountants and administrators had receipts and everything for the fraudulent purchases, they were found blameless when the perpetrator was eventually caught.
And when you know about someone who is taking advantage of those situations - whether it is slacking off at work, taking extra-long lunches but billing the time, or just doing a crappy job through either disinterest or incompetence - it chaps your hide. And if they don’t get called to account for it, it creates low workplace morale and a disinterest in being honest because “nobody else is”.
Because fraud is commonplace. So commonplace that auditors have auditors and policies exist that require you to have receipts for all purchases, because regular “honest” employees will rob the company blind otherwise.
When I worked for a large multi national bank (Citi, who shall remain nameless) we had to take at least one two week vacation/absence per year. As in you cannot be logged-in, on line, or on campus, period.
Or the HR matron would wack you (tell you to leave) and have to send Form 23456789098764321-9876 in triplicate to compliance.
Seriously though, a friend who did forensic s/w at another Bank in America (ahem) told me that they caught an embezzler only because the numbers were suspicious at the end of week 2.
One scam that happens in Japan is that people will buy sheets of stamps as an expense and then sell them at ticket shops. Many companies use stamps and not metered postage.
These ticket shops are kind of like scalpers where you can sell things like train tickets, stamps, as well as actual concert tickets.
I worked with a Japanese guy. He quit and set up a company with money from an investor and while they made money, it never was super profitable.
He and the investor had a falling out, he got sacked as president and the investor brought in outside accountants.
This guy had been routinely padding expense accounts, purchasing computer equipment and using it at home, etc., etc.
As he was the president, he signed off on the expenses for himself. The investor didn’t have good safeguards in place to guard against that.
Probably true, but I still bridle at the unspoken assumption that I’m trying to cheat the company blind on something as penny-ante as a lunch receipt on the maybe one time a year I actually expense anything. And the ridiculous requirements- one receipt per page, taped down, stuff highlighted in yellow (not blue, or they’ll bitch) and then some form filled out just-so, etc… It makes me wonder if the point is to make submitting expenses such a pain that you’ll only do it if you really have to. Which is another annoyance to me.
Weirdly, in the one job where I did actually submit regular expense reports(consultant), they were surprisingly cool about the trivial stuff.
Don’t take it so personally. The unspoken assumption is that someone, not specifically you, will cheat if they don’t require documentation. It’s the same reason cops point their radar gun at all the cars, or that parking enforcement officials look at all the parking meters.
It’s easy for physically small receipts to get lost in a shuffle of 8.5x11 sheets, so taping each one to a separate page makes sense to me (FWIW, scanning to a PDF file seems like it might be better). Highlighting? Well, you know what you’re looking for on the receipt, so rather than make an unfamiliar person spend extra time to search for the right dollar amounts and descriptions, it seems to make sense for you to point out the specific values.
Presumably you’re doing all of this tedious work on company time. In other words, you’re getting paid to do this. So I’m not sure why any of this is so onerous.
Even if the company didn’t require it, I would tape little receipts to a big piece of paper. The hassle I would face if the little receipt got separated from the rest of the stuff when they removed the paperclip or staple would be mind-boggling.
But as for the getting paid for it thing. Unless you are an hourly blue-collar worker, your boss is going to tell you “I need the Smith report on my desk before you leave tonight” and you have to work until the Smith report is done. The company doesn’t give a damn if you also have to fill out expense reports, do your own photo-copying, go to the supply room yourself, empty your own garbage can in the central trash bin, or all the thousand-and-one little tasks that they put on you the last time they had a cost-reduction campaign. Generally a professional employee doesn’t get to say “assignments be damned. I leave when the clock strikes five.”
Not paid by the hour, so it’s really taking away from time that I could do other stuff.
I guess it just seems like a distrustful exercise in nitpickery, where some petty bureaucrat can gripe about two or three small ones being on the same page, or them being in the wrong order, or whatever. And all for some minuscule amount of money.
It’s been bad enough that I’ve intentionally not bought stuff that would help things out, because the expense reimbursement process was so byzantine and annoying.
Ah, yes, it’s possible that accounting is being used as a tool to reduce expenses and/or that one of the directors is just having a power trip.
At my previous employer, a few people had company credit cards, for which we did have to file receipts at the end of the month, and we had a written policy of requesting clearance for purchases above 1000$.
A colleague went on Expedia to schedule her yearly trip to an industry conference, found that the whole trip would come to about 900$, so she just went ahead and clicked. When the monthly CC bill came in, the finance VP (who was also the HR lady) summoned the colleague and told her that this was unacceptable, etc. The colleague’s arguments (that 900 is less than 1000, that she had been attending this conference the same way for 20 years, etc.) were seen as arrogance.
Shortly afterwards, all the company credit cards were recalled except for those of the actual salesmen; everybody else would have to purchase things on their own dime and then submit the receipts at the end of the month along with an itemised Excel sheet to get reimbursed. If something really required a credit card, we had to submit a request for the junior accountant to do the actual clicking using her card. And no trips could be purchased on sites like Expedia anymore, we now had to arrange trips by talking to humans at a specific travel agency (this was in 2015 or 2016).
In that same period, we ended up with a no-jeans dress code (“in case any customers ever come here”) and flexible working hours were eliminated. So, yeah, power trip.
Yeah, I get the annoyance of the piddly details. My annoyance was if they paid directly for the item/travel, it was a company expense, but if I paid for the item/travel and asked for reimbursement, it was “income” and was taxed by the IRS. Ergo, the policy of paying for it and getting reimbursed hurt me financially, whereas a policy of the company paying would not, and should not affect them either way as to them it was the same expense. But that’s how it goes. That’s not the accountant’s fault.
It actually may have been the accountant’s fault for not explaining the situation to the policy makers properly. If your company covers your expenses through an accountable plan*, those reimbursements are not income and therefore not taxable. Any other “reimbursements” - a flat monthly or weekly amount for gas and tolls, a set payment or reimbursement for dinner when working past a certain time, $200 to buy holiday gifts for customers, no receipt required - are income and therefore taxable. But you might be able to deduct the expenses from your tax return.* If they are using an accountable plan, the company doesn’t benefit by including the reimbursements in your income.
Of course, your employer could be as shady as my husband’s company used to be. Didn’t use an accountable plan - “expense allowances” were really just raises and were unrelated to expenses. They weren’t included in W2 income (which is what the company was supposed to do but they didn’t want to pay SS tax) but were reported on a 1099- which meant that my husband had to file a self-employment schedule and pay not only income taxes but both halves of SS& Medicare tax. One year, we didn’t get one of the 1099s and got audited because our income didn’t match the IRS records. Next year, we got audited because we had been audited the year before. The CFO finally got through to the owner that they might get in trouble ( for avoiding the payroll taxes) and they switched to an accountable plan.
*An accountable plan requires you to substantiate expenses, only reimburses for expenses that would be tax-deductible ( for example, no employee meals when not traveling) and requires you to return any overpayments if funds are advanced to you.
When they start getting picky about number of receipts taped on a page or the order, that’s not procedure, that’s them being a dick.
There’s the saying that an auditor is a person that has the training to be an accountant, but doesn’t have the personality needed.
That does not sound right at all - unless you not an employee but a contracted company (i.e. you own consultancy) in which case, that’s part of your own company’s business expenses. If it’s a legitimate business expense - travel, dinner meeting, office supplies, etc. - it’s not income.
Or else your accounting department has no clue. (Surprise!) If your jurisdiction has payroll taxes (and I assume employer Social Security deductions) they are shooting themselves in the foot too by calling that income.
I never paid income tax on my expense reimbursements. It sounds like your company didn’t have their system set up properly. Business expenses are deductible from your income, and if your company is reimbursing you, it nets out to zero (for you.)
There may be complications with unaccounted-for per diems if they go over some limit, but I never ran into that.
I’ve found over the years that people with a certain mindset and outlook tend to gravitate toward the more procedural side of accounting. They tend to be extreme rule-followers, very ordered and organized, very just-so. And frankly very boring. They’re the ones who like very quiet offices, for example.
So when they go to write procedures for people to follow for expenses or whatever, they write them in a way that satisfies them, even if it’s absurdly nitpicky and obsessive to the rest of us.
I guess the way I look at it is that they’re welcome to be that way in their own lives, but don’t try and push that weirdo business on anyone else, and they certainly shouldn’t be in charge of anything.
That’s true- but it’s by no means restricted to accounting. I could spend all day ranting about procedures at my government agency that make no sense- starting with the statewide online training system that will generate reports and completion certificates regarding employees who have completed specific training. But my agency’s training department won’t accept those reports or certificates - they want their own form. Which I as the supervisor have to sign certifying that I have seen the very same certificates the training department won’t accept.
As I said, the classic Dilbert is: “We need original receipts, not photocopies; but if you’re in a hurry, you can fax us the receipts instead of mailing them.”
That is exactly what I do, and I have no accountant or higher up demanding that I do it. It just makes it so that, rather than a file folder crammed with a bunch of wadded up receipts, it is a file folder full of easy to find and use receipts(I even put them in order by date). I then scan and upload them to my backup server.
In over 6 years, no one at all has asked to see any of them, but should I ever be audited, I will have all of my proof of purchases of business related materials at hand.
I cannot imagine the panic that is felt by small businesses that receive an audit notice, and are not well prepared for it.
There is actually a purpose behind having consistent accounting procedures. And you are correct, they shouldn’t, and don’t try to push their business on anyone, not anyone at all, other than the employees that are paid to follow company procedures and guidelines whether or not they personally understand the need for it.
I had an employee when I was a food service manger that just could not understand why we needed him to wash his hands after using the bathroom or changing tasks. After explaining several times the basics of germ theory and consequences of cross contamination, and him thinking that it was just a power trip of the managers being dicks, I eventually told him that it did not matter whether or not he understood the reason for washing his hands, he must wash his hands or face immediate and severe disciplinary action.
Now, should I have, since he was not able to understand the reason for the policy I asked him to follow, allowed him to be exempt from the policy that protects customers from potential food borne illness?