How to Effectively Manage Employee Expenses

How to Effectively Manage Employee Expenses

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where to buy avodart in canada Employee spending can add up fast and also lead to fraudulent behavior if left unchecked. Managing employee expense reimbursements can be challenging, especially for a small business. As a business owner, you need to know what you’re reimbursing for, while also being fair to employees. Here are four tips to help keep expense costs down and avoid fraud.

http://childrenscreativelearningcenter.com/calendar/2016-10-05/ Clearly identify your expense reimbursement policy and set a timeframe for submitting and reimbursement. It’s OK to have different policies for different positions or levels of employees. Make sure every employee has access to their relevant policy and understands what will be reimbursed (travel, food, mileage, etc.) and what will not.

http://northernitsolution.com/course-autocad.php Be aware of tax rules and recent changes. According to the IRS, “an ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your business.” Expenses must have a business connection and may include travel, meals and supplies but no longer entertainment. For 2018, the standard mileage rate for the cost of operating your car for business use is 54.5 cents per mile. Other recent tax changes include only a 50 percent deduction on meals and no deduction after 2025.

Create an expense report that’s clear and easy to use. This can be done using appropriate software or on your own. Expense reports should be stored in a location that’s easy for employees to find and access. Add a reminder to the report about when it’s due and what materials, like receipts, should be attached.

Use company credit cards to easily keep track of expenses. Many banks offer credit cards just for small businesses. Using business credit cards responsibly can help keep track of expenses in one place and make reporting them much simpler. These types of cards may also offer rewards, from cash back to airline miles, so you’ll be making money while your employees spend. Just be sure to only give credit cards to employees who can be trusted and put limits on spending when necessary.

A note about fraud: A fraudulent disbursement scheme is when an employee makes a claim for reimbursement of fictitious or inflated business expenses. Expense reimbursement is the fourth most common occupational fraud scheme in the United States, according to a 2018 Global Study on Occupational Fraud and Abuse, so be sure your employees’ expenses are legitimate and put as many controls in place as possible to track and control spending.

Tips to Keep Costs Down - details in the article text

MidSouth Bank offers business credit cards with the ability to change or add additional cardholders, increase an employee’s credit limit, sign on and view all accounts in real time and view spending analysis. ScoreCard® Points are redeemable for travel, merchandise and more. Learn more.

Additional Sources:

Five Tips for Managing Employee Expense Reimbursements

Create a Plan for Managing Employee Expenses in Your Business


https://www.irs.gov/publications/p463
https://www.irs.gov/tax-professionals/standard-mileage-rates

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