“The best product available for managing expenses!”
“Using Soldo has totally transformed our expense process. My employees are delighted by the ease of use – as am I!”
What is business expense reporting?
Expense reporting is a way for you to track and verify the payments your team makes in the course of doing their jobs.
Traditionally, members of your team would have to complete a form detailing their expenses for the month, and attach proof of the cost. If these expenses are considered allowable by HMRC, you’d then be able to recompense your employee and deduct it from your business taxes.
But with Soldo, a multi-user expense account with advanced spending controls, the process is automated. This means there’s no form to fill in and no receipt to manually submit: it can all be done on a mobile app in a couple of clicks.Get started
Why do I need employees to report expenses?
For one, expenses are treated by the government as tax deductible, but only if you have all the details about the expense – date, receipt and so on – to show for it. For another, members of your team aren’t likely to be very happy if they’re left out of pocket just for having done their jobs. Others may not be able to afford it at all.
Fortunately, digital tools like Soldo make expense reporting simple. It’s simply a matter of making a payment using a prepaid card, submitting a receipt via the mobile app and approving them on a payment control platform.Get started
What does the expense reporting process involve?
There are two ways you can carry out your expense reporting.
Up to now, expense reporting has largely been done by hand.
This means members of your team have had to itemise their expenses on a form at the end of each month. This form will be tailored to suit your own company, but it usually requires the following information:
- The nature of the expense (airfare, meals, fuel costs etc.)
- The date the expense occurred
- The cost of the expense
- The total reimbursement requested
- The account details the reimbursement should be made to
An expense report form may also include a rundown of the items that are and are not acceptable according to the company expense policy, or a link to a more comprehensive policy document.
Employees also need to remember to staple physical proof of payment – a receipt or flight confirmation printout, for example – to the form. That way, your accounts team (and HMRC, if necessary) can verify the legitimacy of the expense.
The alternative is to automate expense reporting with a digital tool like Soldo.
With Soldo, you can give prepaid cards to as many of your employees as you like, and load them with as much money as you think they need. You’ll be able to apply your own rules and limits to the cards, so there’s no risk of runaway costs and trigger-happy spending.
They are linked to an app, which automatically registers a payment the moment it’s made. All your employee needs to do once they’ve made a purchase is log into the app, take a photo of the receipt and press submit. The app will automatically extract all the relevant information for them, and send it to you or your finance team.
You’ll able to see every cardholder next to their expenses on the payment control platform, so you won’t need to spend time reconciling expenses at the end of the month. The photo of their receipts will be there, too. So if HMRC ever come knocking, you can just search the cardholder or the expense to find the proof of payment.
Frequently asked questions
Business expenses can be deducted from your business taxes, but only if you’re able to prove they’re HMRC-approved running costs.
It’s unlikely you’ll need to send your expense receipts to HMRC, but you’re expected to be able to produce them if requested. In fact, it’s sensible to keep the last three years’ worth of receipts for reference.
Note that a bank or credit card statement isn’t sufficient as proof of expense. All this proves is that a payment was made, but it’s missing many of the key details you need, including what the payment was for and where it was made.
A tax deduction is a form of incentive offered by the government. It serves to lower your taxable income, which in turn lowers the amount of tax your business owes. If, for example, your turnover is £40,000, and you claim £10,000 in allowable expenses, you’ll only pay tax on the remaining £30,000.
There are lots of rules around which employee expenses are exempt from tax and which aren’t, and you can find them all on the HMRC website.
But in short, tax-deductible expenses are those that represent your business’s everyday running costs, and they include:
- Office costs, including stationery, printing costs and postage
- Travel costs, including fuel, taxis, airfares and train tickets
- Accommodation and meals
- Miscellaneous costs, including client entertainment, parking and transaction fees
An employee expense policy covers what team members are and are not allowed to claim company money for.
Its purpose is to clarify how much they’re allowed to spend on things like food and travel. It also tells them what they aren’t eligible to use funds for, so there are no disputes further down the line. You can draw the line wherever you decide, whether it’s at travel insurance or five star hotels.
Using Soldo, you can make sure they adhere to these conditions. Simply give them each their own prepaid card, and add rules and limits to define where and how they can spend their money.
There are a number of reasons to create a watertight expense policy:
- Limit costs and outgoings: Your policy makes it clear what is expected of your employees, and what they can use company cash for.
- Foster a culture of fairness: If members of your team feel adequately compensated for business costs, they are less likely to submit exaggerated claims.
- Prevent fraud: Your policy is a concrete document you can use to protect yourself if you feel employees have overstepped the mark.