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Business Advisory, Personal and Corporate Taxes, Business Start-Up, Bookkeeping

Employee Expense Claims: The Good, The Bad, and the Head-Scratchers

Shaw & Associates Chartered Accountants is happy to take on all of your accounting needs, including checking and reimbursing employee expenses. 

There is a rise in non-allowed employee expense claims in Canada, with some of those claims varying from puzzling to outrageous. Having a good plan for employee expense reimbursement and having someone like Shaw & Associates working with you will go a long way to preventing employees from taking advantage of an expense reimbursement plan.

Legitimate Expenses Reimbursed – No Problem

Most companies reimburse employees for legitimate expenses they have incurred on behalf of the company. These include things like travel costs that an employee pays for a work trip, supplies that an employee buys for use in the business, or costs incurred while meeting clients for the business. These expenses should be reasonable and common for your industry. For example, a salesperson who is often required to meet with clients at their job would normally be reimbursed for the expense of driving their car to the client’s worksite.

Nope, No One Gets to Claim for THAT!

While most employees who put in claims for expense reimbursement are not trying to take advantage of their employer, some employees seem to operate on the basis of a, “You never know if you don’t try it” system. 

Some of the more notable claims for expense reimbursement that employees have tried to claim are for illegal activities, expensive restaurants (far beyond what would be normal for taking a client out for a working meal), hiring a limousine when a taxi would have sufficed, or buying personal items for the employee or the employee’s house.

Expense Plan and Employee Engagement

Your best plan is to have an employee reimbursement plan, discuss employee expense reimbursement with all your employees regularly, and make sure everyone understands what is and what is not a legitimate business expense. It’s also an extremely good idea to require proof of expenses for all expense claims, and make sure these receipts are checked before money is given out.

Here’s a quick video with some tips on staff expenses and reimbursement.

Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.