Work-related expenses have dominated headlines in recent weeks, courtesy of Bronwyn Bishop’s hefty travel claims. Some of the former Speaker of the House of Representatives colleagues on both sides of the house have also been criticised.
Most small business folk are unlikely to be presented with the bill for a helicopter ride or required to discipline or demote the staffer who incurred it – but managing employee expense claims can be an issue for many.
Having a clearly defined expenses policy is the first step to ensuring workers don’t try to pull a swifty at your expense or lash out too lavishly when they’re travelling, or wining and dining, on the company credit card.
Start by deciding what details staff are required to provide to justify any major expenses they plan to incur, such as flights, accommodation or hospitality and entertainment for clients.
Be specific about the spending limits – economy-only flights and x dollars per night for accommodation, say – the evidence they’ll be required to provide for reimbursement and any time limit for doing so.
Not sure how much is fair? The Australian Taxation Office lists market rates for accommodation and meal expenses in capital cities and country centres in its 2016 Taxation Determination for travel and overtime meal allowance expenses amounts.
Offering rewards for employees who save the company money by booking flights in advance or choosing frugal four star accommodation can encourage them to seek out maximum bang for your travel buck.
Consider using these figures as a guide if yours is a business where staff are on the move often and you’re happy for them to choose their own berth, Melbourne accountant Dr Steven Enticott suggests.
Offering rewards for employees who save the company money by booking flights in advance or choosing frugal four star accommodation can encourage them to seek out maximum bang for your travel buck, adds Ross Fastuca, co-founder of Locomote, a travel and expenses software vendor.
Processing and paying expenses claims is usually the province of accounts but if you want to keep track of what’s going on – and out – a policy which requires claims to be signed off by two people may be prudent.
And don’t be afraid to ask whether the outcome justifies the outlay.
If an employee can’t identify a clear benefit that’s arisen from their spend – think the chance to secure a major account, boost relations with existing clients or raise the company’s profile – then it may be time for a discussion on how resources could be better spent.
“Always evaluate the expense – was it worth it?” Dr Enticott says.
Sylvia Pennington is a Brisbane-based freelance journalist who writes about small business, information technology and personal finance.