These are the most common mistakes when submitting expenses

There’s no need to sugar coat it: submitting expenses can be a hassle.  Even something as simple as buying staples for the office can turn into a labyrinth for the person who bought them, for the approver and even for the Finance team. People forget to claim their expenses in due time, receipts get lost or damaged and personal spending can get mixed up with the business ones.

Everyone makes mistakes when submitting expenses, and while all employees should be aware of the importance and benefits of submitting them correctly, these missteps can still happen. And even the slightest of errors can lead to non-reimbursement, financial discrepancies, or unintentional suspicion of wrongdoing and fraud.

But if you know exactly where to look and that there are solutions out there that can help steer clear of these mistakes, you avoid pitfalls, streamline your expense management process and protect your organisation in case of an audit. So here are the most common mistakes when submitting expenses you should be aware of, and how to avoid them.

If you work in Finance, you’ve probably been through this more times than you can count the fingers on both your hands. It’s the end of the month, time to check all those expenses that employees have accumulated over the last few weeks, and when you try to get the receipts from everyone, most of them have no idea where the papers are.

Receipts, invoices and any other documents are essential to the reimbursement process. Without them, there’s no way for the Finance team to have proof of what the amount spent was, so they have grounds to deny the request for reimbursement, as they are also risking fraud.

Invoices and receipts should always be provided as a way to prove that the expense was incurred and for what reason. It provides essential data that allows the Finance team to connect the expense claim to the actual expense, such as the date of purchase and the merchant.

One way to avoid this is by using expense management softwares like Rydoo, that allows employees to immediately scan the original document that is then kept in digital format. Be aware that, in some countries, physical proof might be necessary, as there are no paperless expense management regulations in place.

Even the slightest of errors can lead to non-reimbursement, financial discrepancies, or unintentional suspicion of wrongdoing and fraud.

Losing track of receipts is one thing, but one other common mistake is submitting damaged receipts. It’s a tale as old as time: receipts get crumpled up in wallets, pockets or the countless nooks and crannies of a car and end up unreadable.

Submitting damaged receipts and invoices is about the same as not providing them at all. If there’s no way to use them as proof of expense, the Finance team can deem the expense as non-reimbursable, as it is a way to protect the organisation in case of an audit.

Using an expense management solution can also help with this situation, as OCR technology can scan the information from a receipt in just a few seconds, which is then stored in the organisation’s account. So, even if you need to provide a physical copy of the receipt that has been damaged, there is a backup digital copy with all the necessary information.

It’s easy to get personal and business expenses mixed up, and it happens more often than you would think. Imagine that an employee is in a meeting with a client in a restaurant’s bar, but after the encounter, they decide to have dinner with some friends at the same place, without closing the bar tab first. In the end, the receipt will mix the amount spent during the meeting and afterwards, mixing a professional and a personal expense.

It might seem like nothing much, but the reality is that this simple mishap can create a mess when it’s time to ask for a reimbursement. Companies need to know their money went to work-related stuff, and mixing personal with business expenses can distort financial reports and lead to auditing challenges. As for the employees, they can be seen as careless or, even worse, deceitful.

The best way to prevent this mistake is to adopt a protective approach, such as using separate payment methods for personal and business transactions. And there’s even solutions to prevent employees from spending out-of-pocket money on these expenses, like corporate smart cards. If an employee pays for the bar drinks using a Rydoo Card, for example, the software automatically creates an expense within the app, and all they need to do is fill out all the necessary information and submit for approval.

Receipts, invoices and any other documents are essential to the reimbursement process.

Imagine a situation where you’re at a company event that includes a live panel and you want to offer some gifts to the speakers. The next day, you submit the expense and it gets flagged because it’s over the limit of the amount you were allowed to spend on customer gifts.

If you’re unfamiliar with your organisation’s expense policy, it can lead to mistakes in your submissions, which, in some cases, might be viewed as suspicious or even potentially fraudulent actions. Even if any misunderstanding is clarified, lingering doubts could cast a shadow over your future submissions.

To avoid these complications and ensure compliance with your internal policy, it’s important to familiarise yourself with your company’s regulations. By doing so, you’ll gain clarity on which types of expenditures are reimbursable, and the proper procedures for filing reports and securing reimbursements.

Understanding the travel-related expense system can be confusing at times, and employees often think that it’s easier to simply provide all the receipts for the expenses incurred during a trip. However, most of them do not qualify for reimbursement, as Per Diem rates apply in most situations.

If an employee travels for work and goes to a restaurant for lunch, that meal is already covered by the Per Diem amount of that day. Unless the meal involves a third-party — the rest of the team or a client, for example —, it should not be submitted for reimbursement, as it is already covered.

The same happens with other travel-related costs such as flights, hotel bookings or transportation fares. Most organisations cover these costs with Per Diem, hence why they should not be submitted for reimbursement. A way to make this simpler is to provide employees with an expense management system that allows them to automatically calculate and submit their Per Diem while travelling.

Mileage claims are essential for employees on the move, but they can also be one of the most overlooked or inaccurately recorded expenses. Unlike other expenses, which are often linked to meals or accommodation, mileage depends on continuous and accurate tracking. The challenge arises when employees, often focused on preparing for the client meeting or event they’re attending, forget to record the start and end points of their journey.

This not only affects reimbursement but also impacts the company’s financial records, leading to potential discrepancies during audits.

Using digital systems can help overcome this challenge and avoid mistakes while submitting expense reports. Rydoo’s mileage tracking system, for instance, allows employees to mark the starting and ending points of their trip using Google Maps, and the software automatically calculates the mileage reimbursement rates for the trip, according to local laws and regulations. This helps the employees get fair rates for their reimbursements and keeps the organisation compliant.

When employees incur a lot of expenses, it’s easy to lose track of what has and hasn’t been submitted, especially when submitting expenses using manual reports. Receipts get mixed up in folders, employees lose track of what client they took out to lunch or just for drinks, and mistakes happen. One of the most common ones is submitting the same expense more than once.

Duplicating expenses, either accidentally or intentionally, can cause discrepancies in the financial records of the organisation. It can even be considered fraudulent behaviour, putting both the company and the employees at risk of paying fines.

Using digital expense management systems allows for the organisations to set up specific rules to avoid this mistake. In Rydoo, for example, whenever an employee submits an expense that has already been created, the system sends an automatic warning that the expense is duplicate. The approver will also get a similar notification in case the expense is submitted, so they can confirm and reject it in just a few clicks.

Duplicating expenses, either accidentally or intentionally, can cause discrepancies in the financial records of the organisation.

When submitting an expense for reimbursement, it’s not just about the amount spent, but also the “why” behind the expenditure. Sounds simple, right? The reality is, employees tend to miss this step often when submitting their expense reports, but it is essential for the Finance team for a multitude of reasons that go beyond just recording numbers

It helps with auditing, ensures expenses meet company policies, and assists finance teams in categorising and allocating funds appropriately for budgeting and planning. Moreover, specifying the reason for an expense promotes transparency and accountability within the organisation. It prevents potential discrepancies where expenses might be mistaken for personal or non-compliant costs, leading to reimbursement issues. For instance, a simple dinner receipt becomes more transparent when annotated with “Dinner with X Client for project discussion.”

Recording the business purpose is a best practice that ensures the company’s resources are used both effectively and responsibly, and it can be easily done within an expense management software, where whenever an employee is submitting an expense, the employer can provide a specific field to add comments regarding that expense.

We’ve all been there: pushing tasks to the next day, then the next week, and before you know it, it’s been months. But when it comes to submitting expenses, procrastination can be a costly habit.

Waiting too long to submit an expense might lead to missing receipts or memories of transactions getting hazy. To avoid this, some companies have strict deadlines for expense submissions, and if employees fail to meet them, they won’t get their reimbursements.

For the companies, this is a way to avoid problems with budgeting and forecasting. If all employees fail to submit their expenses on time, the Finance team will be left trying to piece together multiple puzzles of missing pieces of information, which can affect future business decisions.

A solution for this is providing a digital expense management system that allows for expenses to be submitted as they happen.

Now that you know what are the most common mistakes when submitting expenses and how they can be avoided, it’s time to adopt smarter habits and take advantage of the modern tools that can make everyone’s jobs easier. Jump into the future and into a smooth, hassle-free process, benefiting both your employees and your organisation.