Expense reporting: which method to use?

As you may know, there is no particular established method for creating expense claims. The law has no specific conditions, and each company is free to create its own expense reporting template. However, without there being any standard template or dedicated solution, entering expense claims can be a long and tedious process, both for employees gathering and submitting their supporting documents and for accountants collecting and sorting the receipts. 


Is there a way we can improve this process? 


How can we implement an effective method for managing expense claims?


An expense claim is an essential document for getting reimbursed for expenses incurred while at work. Each company is free to design its own template in whatever format it likes, whether an Excel sheet, an automated solution or otherwise. 


The main thing is to find a method that suits your business, which will allow your employees and your accounting department to be faster and more efficient. 


You therefore need to consider the company's spending and purchasing policy, as well as the type of expenses that employees usually incur. Naturally, each approach has its own unique advantages and disadvantages. For example, some companies prefer to manage expense claims as they go and decide how to reimburse them case by case, whether immediately, at the end of the month or another time. However, this can run the risk of becoming disorganised. 


Whichever method you choose, designing a clear and transparent template for expense claims is essential. All business expenses need to be justified in principle, with a proof of purchase, invoice, receipt, etc. Additionally, each expense claim should include the identity of the employee who incurred the expense. 


These are the details that should appear on an expense claim: 


    • The merchant
    • The employee
    • Date of the expense
    • Amount inclusive of VAT
    • Amount exclusive of VAT (if you want to reclaim the VAT)
    • Currency (euros, dollars...)
    • Country where the expense was incurred 
    • Type of expense (meal, accommodation, taxi, fuel, etc.)


For simplicity, it's a good idea to create predefined lists of expense categories. For example, your template could include an area specifically dedicated to mileage costs. These would be calculated according to a specific scale, and do not require the same information that usual expense claims do. Creating dedicated areas in your expense reporting software, for example, can save you time when entering data. 


For mileage costs: when employees use their own vehicle to travel to their workplace, they are allocated mileage allowances set by the tax authority scale. This means the company reimburses its employees for the mileage costs incurred when using their own vehicle for work purposes. To receive a mileage allowance, employees need to send their employer proof of the expenses they incurred for using the vehicle, including the purpose and date of the trip. The mileage allowance calculation shows the total allowance to be paid to the employee according to certain factors, including the vehicle's tax rate and the distance traveled.


Additional information to add to an expense claim


You can add various information to your expense claim template to meet your specific requirements, including the payment method, reason for the expense, the relevant business trip, etc.

For example, it might be useful to specify certain factors depending on the type of expense. 

For catering expenses, we could include the number of plates and cutlery, the names of the guests and the company they belong to, or even a category (customer/prospective client/supplier) if applicable, or the type of meal (lunch, dinner, breakfast, snack).

For accommodation expenses, the number of nights and the hotel address could be specified. As a reminder, to be eligible for reimbursement, an accommodation expense must be for business travel and meet one of the following two conditions: 


  • The distance between the employee's home and the location of the business trip must be at least 50 km
  • This distance cannot be travelled by public transport in under 1.5 hours 

Finally, for fuel expenses the type of fuel could be specified, since VAT is reclaimed differently for petrol, diesel or electric recharging. You'll also need to state whether it's a commercial vehicle (van) or private vehicle (car).


How can we improve the reimbursement process for expense claims?

As we have seen, managing expense claims can be a complex and time-consuming process, and poses a real challenge for companies. In the digital age, accumulating piles of (easily lost) paper expense claims should surely be over! 


As well as creating a customized expense claim template that fits the company's structure and requirements, an ideal solution would also digitize the entire expense reporting process. All the data would then be calculated automatically, including VAT


An automated solution like this allows companies to analyse all their business expense data in real time, providing them streamlined information and fully transparent expense management, as well as real benefits in terms of time saving and convenience. And it doesn't stop there – using expense reporting software also significantly reduces the risk of fraud, while relieving the accounting departments of having to check receipts. 

Digitization and automation of processes are therefore the two essential factors when it comes to simplifying expense claims management. The good news is that every company can reap these benefits. 


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