Earlier, my company's reimbursement policy required employees to submit bills for hotel stays, travel tickets, and any miscellaneous expenses incurred during business trips. However, since employees frequently travel for work and have a daily food allowance, the company has now updated its policy.
Under the new policy, employees must submit payment receipts along with the corresponding bills for all expenses, including food. According to the Accounts Manager of our company, this change is necessary to meet auditing requirements, as auditors require both the bill and the payment receipt for verification. Additionally, if an employee withdraws cash from their bank for expenses, they must provide a bank statement as proof.
This new requirement has made it challenging for employees to obtain food bills in certain situations. Could someone provide guidance from an auditing perspective on whether both bills and payment receipts are mandatory for all types of expenses? Is there an alternative approach that could ease the burden on employees while ensuring compliance with auditing standards?
From India, Noida
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1Under the new policy, employees must submit payment receipts along with the corresponding bills for all expenses, including food. According to the Accounts Manager of our company, this change is necessary to meet auditing requirements, as auditors require both the bill and the payment receipt for verification. Additionally, if an employee withdraws cash from their bank for expenses, they must provide a bank statement as proof.
This new requirement has made it challenging for employees to obtain food bills in certain situations. Could someone provide guidance from an auditing perspective on whether both bills and payment receipts are mandatory for all types of expenses? Is there an alternative approach that could ease the burden on employees while ensuring compliance with auditing standards?
From India, Noida
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From an auditing perspective, it is common for auditors to require both bills and payment receipts for verification purposes to ensure accurate expense reporting and compliance with auditing standards. However, there may be alternative approaches that could ease the burden on employees while still meeting these requirements:
Potential Alternative Approach:
1. Policy Review: Conduct a comprehensive review of the reimbursement policy to identify areas where the requirement for both bills and payment receipts can be streamlined without compromising audit integrity.
2. Expense Categories: Differentiate between types of expenses based on their significance for auditing purposes. For example, separate out meal expenses from other miscellaneous expenses to adjust the documentation requirements accordingly.
3. Thresholds: Establish thresholds for expense categories where only one form of documentation (either bill or payment receipt) is required. For lower-value expenses, a simplified documentation process can be implemented.
4. Electronic Receipts: Encourage the use of electronic receipts where applicable, especially for food expenses. This can streamline the submission process for employees.
5. Internal Controls: Implement robust internal controls to monitor expense claims and ensure compliance. Regular audits can help identify any discrepancies or potential issues early on.
By implementing these alternative approaches, the company can strike a balance between easing the burden on employees and maintaining compliance with auditing standards. It is essential to consult with relevant stakeholders, including auditors and employees, to tailor the policy adjustments effectively.
http://Example of a streamlined reim...rsement-policy
From India, Gurugram
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Potential Alternative Approach:
1. Policy Review: Conduct a comprehensive review of the reimbursement policy to identify areas where the requirement for both bills and payment receipts can be streamlined without compromising audit integrity.
2. Expense Categories: Differentiate between types of expenses based on their significance for auditing purposes. For example, separate out meal expenses from other miscellaneous expenses to adjust the documentation requirements accordingly.
3. Thresholds: Establish thresholds for expense categories where only one form of documentation (either bill or payment receipt) is required. For lower-value expenses, a simplified documentation process can be implemented.
4. Electronic Receipts: Encourage the use of electronic receipts where applicable, especially for food expenses. This can streamline the submission process for employees.
5. Internal Controls: Implement robust internal controls to monitor expense claims and ensure compliance. Regular audits can help identify any discrepancies or potential issues early on.
By implementing these alternative approaches, the company can strike a balance between easing the burden on employees and maintaining compliance with auditing standards. It is essential to consult with relevant stakeholders, including auditors and employees, to tailor the policy adjustments effectively.
http://Example of a streamlined reim...rsement-policy
From India, Gurugram
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Dear Shruti Arora,
When one reads the first and the second paragraph of your post, one does not find the difference. What has changed? Nothing!
Nevertheless, to avoid the deep audit of the bills, your company may fix the per-day allowance as per the designation. The claimant can just raise the claims without being required to submit the supporting bills. While auditing of the TA/DA claims is important as the audit team deterrence, it is important to check the cost of the audit. Find out how many claims are passed per month and what is the audit cost per claim.
Having said that many companies follow the procedure outlined by the audit team of your company. As and when the expenses are incurred, the employee can take a photo of the bill. Later, a consolidated claim can be submitted for the in-station or outstation visit.
Thanks,
Dinesh Divekar
From India, Bangalore
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When one reads the first and the second paragraph of your post, one does not find the difference. What has changed? Nothing!
Nevertheless, to avoid the deep audit of the bills, your company may fix the per-day allowance as per the designation. The claimant can just raise the claims without being required to submit the supporting bills. While auditing of the TA/DA claims is important as the audit team deterrence, it is important to check the cost of the audit. Find out how many claims are passed per month and what is the audit cost per claim.
Having said that many companies follow the procedure outlined by the audit team of your company. As and when the expenses are incurred, the employee can take a photo of the bill. Later, a consolidated claim can be submitted for the in-station or outstation visit.
Thanks,
Dinesh Divekar
From India, Bangalore
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Dear Shruti
1. Proof of paye,not by way of receipt is not necessary for audit. Your CFO can tell abuses it is not necessary. As long as the expense was valid and approved, audit will accept it. No company requires receipt (or most of the ones I audited). CFO can make a policy and amend the SOP and give it to the auditors. They will have no choice but to accept.
2. If you know people will eat at places where they will not get a bill (road side eateries, railway stall), you can provide a DA/TA allowance which then does not require proofs to be submitted. Or just tell employees to eat at places with formal billing system. The cost will be higher, but we do the same for our audit team (we are auditors and ave to submit proof of expenses for expense claims).
So if they need a bottle of water, they will then buy from a restaurant paying ₹ 25 instead of rail-ne’er a ₹10, but we find that acceptable (and in some cases better for long term health)
3. Regarding bank statement, it’s a violation of privacy and not acceptable. The employee withdraws money to pay for,expenses, but he has proof of the expense, that should be enough. Your auditors are out of line. Ask your CFO top speak to their partner and get this stopped.
4. Lastly, consider getting an expense management software that will allow employees to record expenses on the go and take photos of invoices and expense to submit as proof. It will make life easier both for the employee and for accounts
From India, Mumbai
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1. Proof of paye,not by way of receipt is not necessary for audit. Your CFO can tell abuses it is not necessary. As long as the expense was valid and approved, audit will accept it. No company requires receipt (or most of the ones I audited). CFO can make a policy and amend the SOP and give it to the auditors. They will have no choice but to accept.
2. If you know people will eat at places where they will not get a bill (road side eateries, railway stall), you can provide a DA/TA allowance which then does not require proofs to be submitted. Or just tell employees to eat at places with formal billing system. The cost will be higher, but we do the same for our audit team (we are auditors and ave to submit proof of expenses for expense claims).
So if they need a bottle of water, they will then buy from a restaurant paying ₹ 25 instead of rail-ne’er a ₹10, but we find that acceptable (and in some cases better for long term health)
3. Regarding bank statement, it’s a violation of privacy and not acceptable. The employee withdraws money to pay for,expenses, but he has proof of the expense, that should be enough. Your auditors are out of line. Ask your CFO top speak to their partner and get this stopped.
4. Lastly, consider getting an expense management software that will allow employees to record expenses on the go and take photos of invoices and expense to submit as proof. It will make life easier both for the employee and for accounts
From India, Mumbai
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(Fact Check Failed/Partial)-In general, your advice is helpful, though one point needs clarification. Some organizations indeed require both bills and payment receipts for audit. It varies based on company policy. Keep sharing your insights!
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Expense Reimbursement Policy.doc
CiteHR.AI
(Fact Checked)-You're correct, many companies utilize a per-day allowance system to streamline the auditing process. It's important to balance audit requirements and employee convenience. Your suggestion of utilizing digital copies of bills is also a good step towards modern, efficient practices. (1 Acknowledge point)