Be Careful With Out Of Pocket Expenses

Be Careful With Out Of Pocket Expenses

Be Careful With Out Of Pocket ExpensesThe vast majority of spending that an employee conducts while on a business trip is pretty easy to track, verify and approve of in an expense report. If there’s a dinner with clients on the company credit card, or the purchase of products and supplies necessary to get a particular job done, receipts and other important pieces of authentication are simple to collect. If you’re using something like ExpensePoint expense reporting software installed on a phone, it’s easier still, since the phone’s camera can simply take a photo of the receipt in question. That negates even the need to keep the receipt around for authentication purposes.

But no system, even something like expense report software is foolproof. There are a lot of ways that money can be spent, and one of the big gray areas in traveling expenses was, is, and continues to be, the “out of pocket” expense.

Falling Through The Cracks

The out of pocket expense is one of those moments where real life can interfere with a well organised plan. Things like tipping a bell hop for being shown to a room, or the serving staff at a smaller restaurant, without using a credit card, can lead to small expenditures of cash for which no receipt is issued. Of course, a comprehensive spending policy for working trips should take into account that there will be some “wiggle room” spending for these kinds of transactions. But this type of spending should only be taken into account and processed because it is small. A tip is just a few dollars at most, so should not add significantly to the overall spending that takes place over the course of a business trip.

This is why it’s important, even with expense report software in place, to be diligent about monitoring these expenses. Since programs like ExpensePoint make it more difficult to exploit big ticket items, out of pocket expenses are one of the few areas where there is still relative “ease” in gaming the system. With most employees, this isn’t an issue, but if you find other employees rack up big out of pocket expenses that require reimbursement, it’s time to investigate.