How you can optimize your company’s expense management (and spend the time elsewhere)

If you’ve got employees, the chances are you’ll be familiar with expense receipts. On the one hand, they’re great: they allow your staff to take a customer out for lunch, get a train ticket to that conference or pick up a gadget that makes remote working easier. Work-related costs don’t need to come out of your employees’ pockets and the company can claim back the VAT.

But expense receipts also have a dark side: the admin they generate.

Anyone working in a company’s finance administration team will tell you all about those little slips of paper that get lost like odd socks, forgotten like confetti, or that are incomplete or invalid when they do show up. Rare are those who appreciate the hours spent processing expense receipts, who don’t find the task too time-consuming and, let’s face it, dull; nothing says mundane like flicking through expense slips.

Yet dealing with them correctly is paramount as the penalties can be heavy if the numbers don’t stack up in the eyes of the tax inspectors.

So then, what are the golden rules to follow to stop yourself or your staff from getting mixed up amid all the paperwork? What can you do to make managing expenses as simple as possible?

Surely there’s a better way?

Of course there is. Although we have no idea how it took so long for Humanity to find it, what we can do is share with you the long-overdue solution.

Read our guide and we’ll tell all.

All expenses paid in advance by any employee carrying out their professional duties must be reimbursed. So far, so fair enough.

The reimbursement process requires following certain, rigid rules and will inevitably involve valid expense reports, to be able to prove to the authorities that the employee did indeed make a purchase. Hence the un-loved paper documents showing the nature of the expense, the amount and the date. To be valid, each report must be accompanied by the relevant proof of purchase from the restaurant, travel company, hotel, shop or wherever else the employee spent her or his money. And this is where it can start to get complicated, so let’s keep things simple.

Expenses can be reimbursed either as actual costs or as a fixed allowance.

💡 Good to know: employers are free to apply whichever method of reimbursement they want (a little prior consultation with staff is recommended, but not mandatory). They can also choose to reimburse different employees using different methods, according to their role. Whatever the repayment method, we recommend applying the same expense policy to all staff, that’s to say the rules governing exactly what employees can and can’t buy with company money. Otherwise, the whole expense situation risks becoming very complicated very quickly.

Reimbursing actual costs means repaying the exact amount of money spent, penny for penny and purchase for purchase.

Example: you pay €65.50 to book a hotel room for an overnight business trip. You’re reimbursed by actual cost so your employer pays you back exactly €65.50.

For actual cost reimbursement, a proof of purchase receipt is mandatory.

Generally, a lost or non-justified expense report will not be reimbursed. However (and this could come in very handy one day!), an employee can force the issue with a sworn statement. It’s not a practice that’s particularly favoured by URSSAF but it may do the trick in exceptional circumstances and for small amounts.

The sworn statement must include:

• the name and contact details of the employee concerned;
• the location, nature and amount of the expense;
• the vendor or service provider who billed the expense;
• the signature of the employee concerned.

Ideally, the sworn statement should also be accompanied by a bank statement.

All expense reports must be processed into the bookkeeping. That means doing the following:

• add the expense report into the purchasing log;
• debit the expense account relevant to that particular type of expense.

If that all seems complicated, let’s keep it simple...

Step 1: record the expense in the purchasing log

The purchases journal or purchase log is an accounting register of all that a company has paid for, like merchandise, primary materials and general running costs. Expense reports are no different and need to be included in the log. You’ll need to ensure the presence of the following information:

• the date and amount of the purchase;
• the invoice number;
• the expense account to be debited/credited;
• the expense details (a short description of what the expense is, for example ‘travel expense’ or ‘meal expense’)

Step 2: debit the relevant expense account

The account to debit depends on the nature of the expense in question.

In France, expense reports are usually referenced with category codes, for example:

• Expense category 6063 - “Maintenance and upkeep products and small pieces of equipment”
• Expense category 6064 - “Administrative and office supplies”
• Expense category 6181 – “General documentation” (non-business documents like newspapers and magazines etc.)
• Expense category 6183 – “Technical documentation” (business-related documents)
• Expense category 6251 – “Travel” (for work-related travel costs like train tickets, parking costs, road tolls etc.)
• Expense category 6256 – “Missions” (accommodation expenses for business trips)
• Expense category 6257 – “Hospitality” (such as inviting customers to lunch)
• Expense category 6234 – “Gifts to customers” (non-related to hospitality)
• Expense category 626 - “Postage and telecoms costs” (for employees’ work phone contracts, for example).

You may find that an expense doesn’t fit conveniently into any of the above expense categories. In that case, you can consult the full catalogue of account codes online.

You’re highly unlikely to achieve clarity in your expenses without a clear expense policy. If there are no defined rules on expenses, no formal constitution as it were, you can expect expense anarchy.

Before writing out your policy, take the time to study the difficulties you’re currently facing. What complications do you have in the way your company handles expenses today?

• Paper receipts keep getting lost?
• Do some employees take too much time submitting receipts and create a backlog of expense reports?
• Do you have trouble gathering all the information you need to create an expense report?

With these issues in mind, you’ll find it easier to establish an effective expenses policy capable of addressing your current problems.

For example, you could decide to:

• define limits for each kind of expense (within URSSAF’s boundaries, of course);
• impose deadlines for submitting receipts;
• set out a reasonable reimbursement timeframe;
• train new employees in the best practices of creating expense reports;
• list the documents required for each type of expense.

We would advise you to draw up a document that brings these elements together and to communicate to staff internally. All employees would then have access to the same level of information, making the future management of expense notes more fluid.

Some administrative and finance teams still manage expenses on platforms like Excel and Google Sheet. Others even continue to process expenses manually and generate filing cabinets full of paper receipts and expense slips.

Managing expenses demands rigor and organization. Don’t forget that proofs of purchase must be kept for 10 years, which means considerable paperwork as your business grows and the flow of expenses increases.

There are, fortunately, new digital solutions that can simplify the task for you by relying on the principle of automated expense reports. With these systems, your employees no longer need to keep carrying paper receipts around in their wallets; they simply take a photo of these receipts and deposit them on an app dedicated to that very purpose.

This means no more chasing up receipts. The expense reports are filed away electronically and are accessible with just a few clicks when there’s an audit. The employees, meanwhile, also benefit by being reimbursed in good time.

At Qonto, we’ve developed a tool that even detects VAT automatically, to save you even more time when it comes to your bookkeeping.