Out of Pocket Expenses – To Consider or Not To Consider?

The majority of employee spending that happens while on a business trip is easy to track, review, and approve in an expense report. Some cases such as taking clients for a dinner or purchasing some products required to get the job done – all these can be easily tracked with the help of receipts. If you are using expense tracking software, then this becomes even easier as you can simply take a snapshot of the receipt and attach it to the expense report. This negates the need to keep the receipt for future reference. Also, it would save employee time as you can automatically attach the receipt to any report.

However, there are a lot ways that money can be spent and out of pocket expenses is one area that remains a problem. Out of pocket expenses can possibly interfere with real-life even though you have a well organized plan. Few expenses like giving tips to staff, paying taxis, and many more can result in small expenditures for which no receipt can be issued. All these will be accounted as out-of-policy expenses and turn into a good amount when considered as a whole. The spending policy should take all these into consideration and should leave some room for these kind of transactions to avoid any falsifications.

This is why it is important to monitor all the expenses even when the expense tracking software is in place. As out of policy expenses happen with most employees, it is important to handle these in a better way before they become a huge amount. If no proper action is taken, it would result in employee dissatisfaction, or will end up requiring you to reimburse all the out-of-pocket expense claims.