Answered.
An expenses receipt is a receipt for a purchase made by an employee or contractor in connection with work carried out for a business. Expenses receipts are needed as evidence of the purchase, when the employee or contractor reclaims the money from the business.
If you make a purchase on behalf of your employer, such as for travel to a customer meeting or buying equipment for the office, you need an expenses receipt in order to capture or claim back the cost. Traditionally, companies have required employees to attach these expense receipts to an expense report which is processed monthly in order to reimburse any costs to the employee.
Newer travel and expenses systems make processing expenses receipts much easier, offering apps that allow you to photograph the receipt on a camera phone. The application may use OCR (optical character recognition) technology to extract the key details from the image. These will include the date, amount, VAT percentage and merchant name and address. Less advanced systems may allow the employee to attach the photo as evidence, but they may still need to complete the details manually through a digital form.
Employers check expenses receipts to make sure the expenses reclaimed are for approved costs. Organisations have expenses policies that often set out what employees can claim for, how much they’re allowed to spend and which suppliers they can use. The expenses team in a large enterprise will check these receipts to make sure they comply. In smaller organisations, the finance or HR team may be responsible for expense receipt checking. It can be a time-consuming process: many leading firms use digital expenses management systems to streamline the process, including automatic approvals for certain items and making it possible for managers to review and approve claims online or via mobile apps.
Business expenses receipts are not just evidence for the company to repay the expense. They’re also required by tax enforcement (HMRC, IRS etc.) to check the company has been compliant with business expense tax regulations.
The easier companies make it for employees to submit receipts directly, the more accurate their expenses claims will be. For instance, if an employee can upload a mobile phone picture of the receipt for refreshments at a customer meeting in a hotel coffee lounge as they are waiting for the drinks, there’s less chance they’ll lose the receipt, forget to claim it or claim it months later. Leading travel booking and expenses management systems have inbuilt travel booking capability, so employees can use the system to plan, book and generate tickets for air fares and accommodation. The receipt is automatically added to their running total of expenses.
Improving the speed and accuracy of expenses receipt processing has several advantages for employers. More claims are submitted correctly when OCR is used to record the amounts directly, rather than the employee rekeying information. Enabling line by line expenses submission, so the receipt is uploaded as soon as the expense is incurred, means claimants can be reimbursed promptly, improving the employee experience. Companies can keep track of expenses costs in real time, rather than getting a nasty surprise at year-end, as employees finally get around to inputting a backlog of expenses receipts.
