Have you ever stumbled upon a business expense that just doesn’t seem legitimate? Are you worried about losing money due to fraudulent expense claims?  

 We all know that expense fraud is a serious problem, which is why we’ve put together a list of the most common examples to watch out for.  

 Are you ready to learn how to spot, and stop expense fraud? 

What is business expense fraud?

Business expense fraud is when employees claim unjustified or inflated expenses so they’re reimbursed for mow than they’ve actually spent, leading to more money in the employees pocket but significant financial losses for companies. This deceptive practice can involve submitting fake receipts, exaggerating mileage for personal gain, or claiming business expenses for non-business-related costs.

8 examples of business expense fraud

Misuse of corporate credit cards

Misusing corporate credit cards is a common type of expense fraud. This occurs when employees use company credit cards for personal purchases. For instance, one of your employees might use their company card to buy groceries or pay for a family meal, claiming these expenses as business-related.

Fake receipts and invoices

Employees may create fake receipts and invoices to claim reimbursement for non-existent expenses. A specific example would be your employee submitting a forged taxi receipt for a trip that never happened, thereby pocketing the reimbursement. 

Falsified expense entries 

In this type of fraud, employees enter false information into expense reports. For example, one of your employees could claim they attended a conference and submit expenses for travel and lodging, despite never having left their home office.

Misclassification of an expense 

Misclassifying an expense involves categorising personal expenses as business-related to obtain reimbursement. In theory one of your employees could submit a spa treatment as a “client meeting” expense, thereby getting the company to cover personal indulgences.

Duplicate receipt submissions

This fraud occurs when employees submit the same receipt multiple times to get reimbursed more than once. For example, one of your travelling salesmen might submit a taxi receipt for £50 in March and again in April, pretending it’s a different trip each time. 

Using corporate funds for personal use

Using corporate funds for personal use involves employees diverting company money for their own benefit. An example is your employee using company funds to pay for personal utility bills, claiming them as office expenses. 

Fabricated mileage claims 

Employees might inflate or completely fabricate mileage claims to get higher reimbursements. For instance, your employee could claim they drove 100 miles for a business meeting that was only 20 miles away, thus pocketing the extra reimbursement. 

Over-the-limit meal expenses

Employees may submit meal expenses that exceed the company’s allowable limits, without proper justification. An example would be one of your employees claiming a £150 dinner when the company policy only allows for £75, rationalising it as a “client entertainment” expense.

How you can prevent business expense fraud 

Depending on the size and structure of your business, the way you submit and approve business expenses will vary.  
 
Here are four “easy” ways you can prevent business expense fraud:

1. Implement robust expense policies

A solid expense policy is the first line of defence against expense fraud. Clear guidelines on what constitutes a legitimate expense, the documentation required, and the approval process will set clear expectations for your employees.

• Define allowable expenses: specify which expenses are reimbursable and which aren’t. 
• Set limits: establish spending limits for different categories. 
• Receipt requirements: mandate itemised receipts for all claims (with justifications if necessary). 
• Approval workflow: define who approves expenses and the process they must follow.

2. Perform audits

Regular audits are crucial in identifying and preventing fraudulent activities. By systematically reviewing expense reports, you can spot inconsistencies and patterns that may indicate fraud.

• Regular audits: conduct frequent audits to keep on top of your spend, and to keep your employees vigilant. 
• Detailed reviews: check for duplicate receipts, altered documents, and expenses claimed outside of business hours. 
• Trend analysis: look for patterns such as frequent small claims just below approval thresholds.

3. Provide employee education

Educate your employees about the importance of adhering to expense policies and the consequences of committing fraud, such as disciplinary action. Training sessions can clarify what constitutes acceptable and unacceptable behaviour.

• Training programs: regularly conduct training sessions on expense policies and ethical practices. 
• Communication: use newsletters or internal company updates to remind employees of any policy changes. 
• Integrity initiative: encourage employees to report suspicious activities anonymously.

4. Implement expense management software 

Robust expense management software offers several key features to help you prevent expense fraud effectively:

Electronic receipt capture

• Ensures all receipts are digitised and stored securely in one place. 
• Reduces the risk of lost or altered receipts. 
• Allows for easy and quick verification against claims.

Automated approval workflows

• Establishes a clear and systematic process for approving expenses. 
• Enables multiple layers of review to catch inconsistencies. 
• Speeds up the approval process while maintaining thorough checks.

Real-time tracking

• Provides instant visibility into all submitted and approved expenses. 
• Alerts you to any unusual spending patterns immediately. 
• Facilitates timely audits and reduces opportunities for fraudulent claims.

Policy enforcement

• Automatically flags claims that don’t adhere to your company’s expense policies. 
• Ensures every claim is checked against pre-set rules and guidelines. 
• Minimises the chance of human error or oversight. 

Maintain control over your spending

Are you looking for a system that will make sure that every pound is accounted for and spent wisely? Look no further, book a demo with Capture Expense today and say goodbye to expense fraud for good.

When it comes to the reimbursement of expenses, we know there’s a lot to cover. That’s why we’ve compiled a list of some of the most frequently asked questions (and some that are more niche).  

Are you ready to learn all about the reimbursement of expenses in the UK?

Here we go.

What does reimbursable expenses mean?

Reimbursable expenses are costs that employees incur on behalf of the company while performing their job duties, which the company agrees to pay back. These typically include travel expenses, meals, lodging, and other necessary expenditures directly related to work tasks.

For example, if you travel abroad for a business meeting, the costs of your flight and hotel stay would be reimbursed by your company. 

Do reimbursed expenses count as income? 

In most cases, reimbursed expenses are not considered taxable income. This means that if your employer reimburses you for business-related expenses, you generally don’t need to include those amounts in your taxable income. 

For example, if you’re a salesperson who frequently travels to meet clients. Imagine you spend £150 on train tickets for your latest trip. Since the travel expense was wholly, exclusively, and necessarily incurred in the performance of your job, you won’t have to pay tax on the £150 reimbursement. 

How to reimburse employees for expenses?

Depending on the size and structure of your company, your reimbursement method might vary. Here’s an easy five-step process to help make sure your employees’ expense claims are always legitimate and reimbursed promptly.  

1. Create a clear expense policy

Start by establishing a well-defined expense policy. This should outline what expenses are eligible for reimbursement, the required documentation, and submission deadlines. Make this policy easily accessible to all employees.

2. Make it simple for employees to submit an expense claim

Use detailed expense policy templates that simplify the submission process. Employees should be able to easily fill out necessary details and attach receipts without hassle.

3. Automate where possible

Leverage expense management software to automate the approval and reimbursement process. This helps minimise errors, speeds up processing times, and ensures consistency.

4. Choose a method of reimbursement

Decide how reimbursements will be made. Options include direct bank transfers, payroll additions, or cash in hand payments. Choose a method that’s most convenient for both your company and your employees.

5. Maintain records

Proper record-keeping is essential. Store all submitted forms, receipts, and approval records securely. This ensures compliance with your internal audits and HMRC. Accurate and up-to-date records will help resolve any disputes that may arise.  

More on record keeping coming next. 

How to record reimbursed expenses

Similarly to the previous answer, depending on the size and workflow of your business, the way you decide to record your reimbursed expenses may differ.

Here are five straightforward steps to help you make sure once an expense has been reimbursed it doesn’t get lost:

1. Gather all relevant documentation: collect digital receipts, invoices, or other proof of the expense (with justifications if required). 
2. Categorise the expenses: group them by type (e.g., travel, meals, office equipment). 
3. Record in your accounting system or expense management platform: note the date, description, and amount of each expense. 
4. Reconcile with bank statements: ensure your records match your bank account. 
5. Prepare a summary: create a report of all reimbursed expenses for tax and financial purposes. 

With a sophisticated platform like Capture Expense, once the expense has been logged, it does all the heavy lifting for you. You can even use Capture Expense’s ‘Ask James’ feature to provide you with fully customisable reports based on your data, in real time. 

How do I invoice a customer for reimbursable expenses? 

To invoice a customer for reimbursable expenses you should:

1. Create a detailed invoice: list each expense, its cost, and any applicable taxes. 
2. Attach supporting documents: include copies of receipts or invoices. 
3. Specify payment terms: clearly state when the payment is due. 
4. Send the invoice: email or mail the invoice to the customer. Include your payment terms at the bottom of the invoice. 
5. Follow up: if payment is not received on time, send a reminder. 

Do employers have to reimburse travel expenses? 

Yes, employers generally have to reimburse employees for reasonable travel expenses incurred on their behalf. 

However, there are some exceptions:

• Daily travel: generally, the costs incurred for commuting from home to the workplace aren’t reimbursed, as they fall under the employee’s personal expenses. 
• Corporate guidelines: certain companies may implement specific rules about reimbursing travel expenses. Be sure to review your organisation’s policies before you submit a travel expense. 

What are some other expenses that employers reimburse? 

In addition to travel expenses, employers often reimburse a variety of other expenses that employees might incur while performing their duties.

Common reimbursements include:

• Training and development: expenses related to professional development, such as courses, workshops, or conferences, may be covered to enhance employee skills and knowledge. 
• Work-related supplies: employers typically reimburse costs for supplies necessary for an employee’s job, including tools, software, or other materials required to complete tasks effectively. 
• Remote work expenses: with the rise of remote work, many employers now reimburse costs associated with home office setups, such as internet service, electricity, and office furniture. 

Can a trustee be reimbursed for expenses? 

Absolutely, trustees can be reimbursed for expenses incurred while fulfilling their duties. It’s imperative that trustees maintain transparency and documentation of these expenses, as they’re often responsible for managing the assets and operations of the trust.  

Common reimbursable expenses may include travel costs for attending meetings, legal or professional service fees, and costs related to the administration of the trust.

Can an employer refuse to reimburse expenses?

Yes, an employer can refuse to reimburse expenses under certain circumstances. 

While there is an implied term in employment contracts that employers will reimburse employees for reasonable business expenses, this obligation isn’t absolute. Employers are legally entitled to refuse the reimbursement of expenses if:

• The expenses aren’t reasonable: if the expenses are deemed excessive or extravagant, they may not be eligible for reimbursement. 
• The expenses aren’t necessary for the job: expenses that aren’t directly related to the employee’s job duties may not be reimbursable. 
• The employee hasn’t complied with company policy: if the employee has failed to follow the company’s expense reimbursement policy, the employer may refuse reimbursement. 
• The expense is specifically excluded in the employment contract: if the employment contract explicitly states that certain expenses won’t be reimbursed, the employer can enforce this provision. 

Can an employer withhold expense reimbursement? 

Yes, in certain situations, an employer has the right to withhold expense reimbursements. Here are a few scenarios where this might occur: 

• Insufficient or incorrect documentation: if an employee doesn’t submit the required paperwork to substantiate their expense claim, the employer may choose to withhold reimbursement.  
• Unreasonable or excessive expenses: should the expenses be considered excessive or unjustified, the employer may partially or fully deny reimbursement.  
• Breach of company policy: if an employee doesn’t adhere to the company’s reimbursement guidelines, the employer is entitled to withhold the reimbursement. 

Do you have a question of your own about the reimbursement of expenses? 

Whatever your question, big or small, we are all ears. More importantly, we’re confident that Capture Expense has the solution. Book a personalised demo today to see how we can help. 

Do you reimburse your employees for expenses incurred while working? Do you want to know the legal requirements when it comes to employee expense reimbursement law in the UK? If so, you’ve come to the right place.

We’ll outline what constitutes an employee expense reimbursement. We’ll also look at the legal framework governing expense reimbursement in the UK. Finally, we’ll provide you with our top recommendations so you can stay HMRC compliant and ensure a smooth reimbursement process. 

What is employee expense reimbursement?

Employee expense reimbursement is a process where you repay your employees for business-related expenses they have personally covered. These expenses can include travel costs, meals, accommodation, or any other out-of-pocket expenses they incur while performing their job duties.  

The process typically involves employees submitting receipts or expense reports, which are then reviewed and approved by your finance team before reimbursement is issued. This method helps make sure that your staff aren’t financially burdened by work-related costs, allowing them to focus on contributing to your business’s success. 

Common types of reimbursable expenses in the UK 

Travel expenses

• Commuting: includes transportation costs such as public transport fares, mileage, parking fees, and tolls. 
• Accommodation: covers hotel stays or other lodging expenses during business trips. 
• Meals: encompasses food and drink expenses incurred during travel or while entertaining clients.

Equipment and supplies

• Office supplies: items such as pens, paper, and other stationery. 
• Equipment: larger items like laptops, printers, and office furniture.

Training and professional development

• Courses and workshops: fees for attending professional courses, workshops, or conferences. 
• Certifications: costs associated with obtaining professional certifications relevant to the job.

Phone and internet bills

• Mobile phone bills: monthly charges for business-related phone usage. 
• Internet costs: fees for home internet if used for remote working. 

Employee expense reimbursement law in the UK 

The legal framework governing employee expense reimbursement in the UK is primarily based on common law principles and statutory provisions. While there isn’t a specific statute dedicated solely to expense reimbursement, various employment laws and tax regulations provide guidance on this matter.

Let’s look at some key legal considerations:

Employment Rights Act 1996

The Employment Rights Act 1996 outlines the basic rights of employees, including the right to be paid for work done and to receive wages that are not below the National Minimum Wage. While it doesn’t explicitly address expense reimbursement, it can still be relevant in certain contexts. For example, when employees incur costs related to their job duties, they may expect reimbursement. This expectation typically applies to reasonable expenses incurred while performing their responsibilities.

Tax legislation

UK tax laws, such as the Income Tax (Earnings and Pensions) Act 2003, provide guidance on the tax treatment of employee expenses. Reimbursed expenses are generally exempt from income tax if they are incurred for business purposes.

Implied term of contract

In many cases, there is an implied term in an employment contract that the employer will reimburse employees for reasonable business expenses incurred on their behalf.

HMRC guidelines on reimbursable expenses

HMRC’s guidelines on reimbursable expenses provide detailed instructions on what constitutes allowable expenses (such as travel and subsistence. HMRC distinguishes between business expenses and personal expenses to ensure only legitimate business expenses are reimbursed without tax implications.

Reporting your employee expense reimbursements to HMRC 

When handling employee expense reimbursements, you have two main options for reporting these expenses:

• Firstly, you can use a P11D form to report expenses and benefits to HMRC at the end of the tax year.
• Alternatively, you can opt for payrolling, where you include the value of the expenses and benefits in the employee’s pay. This method spreads the tax due across the year, which can be more manageable.

Record keeping

You should keep records of all itemised receipts, completed reimbursement forms, the purpose of expenses, amounts spent, and any relevant documentation outlined in your expense policy.

Common challenges between you and your employees when it comes to reimbursements

Disputes over what constitutes a legitimate expense

Disputes over what constitutes a legitimate expense can be a recurring issue between you and your employees. Often, the grey areas arise from differing interpretations of the expense policy.  
 
For instance, while you might consider a client lunch a justifiable business cost, an employee could see a casual coffee meeting the same way.

Delays in reimbursement 

Delayed reimbursements can seriously affect your employees’ morale. When your team experiences repeated delays in getting reimbursed for their expenses, it creates financial strain and frustration.  

This lack of timely compensation can decrease trust in your company, reduce job satisfaction, and lower motivation among your staff. 

Expense reimbursement strategies to consider 

Provide employee training 

For an expense to be reimbursable and non-taxable, it must be incurred wholly, exclusively, and necessarily for business purposes. Ensuring that your employees understand this is essential.

You should invest in training sessions that explain:

• What qualifies as a reimbursable expense. 
• How to document expenses accurately. 
• The importance of timely submissions. 

Create a clear and concise expense policy 

An expense policy template is the backbone of any reimbursement strategy.

Your policy should be:

• Clear: avoid ambiguity by laying out which expenses are eligible for reimbursement. 
• Concise: make sure it’s easy to read and understand, avoiding overly technical language. 
• Accessible: employees should have easy access to this document at all times.

Implement expense management software

Manual expense management can be time-consuming and error-prone. Automating this process with expense management software like Capture Expense offers numerous benefits:

• Efficiency: speeds up the submission and approval process. 
• Accuracy: reduces human errors in data entry. 
• Transparency: provides real-time tracking and reporting of expenses. 
• Compliance: ensures adherence to company policies and tax regulations. 

Meet Capture Expense

Simplify and automate how you manage your expense reimbursements using the intuitive Capture Expense app. Book a personalised demo today to see how we can help.

Managing business expenses can get tricky without clear guidelines. If you want to streamline your financial processes and avoid unnecessary headaches, having a solid company expense policy is essential.  
 
So, let’s walk you through the importance of an expense policy template, how to create one, and the best practices for ensuring smooth implementation.

What is a business expense policy?

A business expense policy is a set of rules that outline how your employees can spend company money. It specifies what types of expenses are allowed, how much can be spent, and the process for reimbursement. This policy helps control costs, ensures compliance with HMRC, and provides your employees with clear guidelines.

For example, your expense policy template might cover travel expenses, office supplies, business entertainment expenses, and more. Clear definitions will help your employees understand what’s acceptable and what’s not, reducing the risk of overspending.

Why your business needs an expense policy

Cost control

• An expense policy establishes clear spending limits for your employees, which helps keep costs in check and makes sure that budgetary constraints are respected. 
• It prevents your employees from making unauthorised purchases. This helps make sure that company funds are used wisely.

Compliance

• A robust expense policy promotes adherence to legal and regulatory requirements, reducing the risk of financial penalties.
• It establishes a framework for audits, simplifying the tracking and verification of expenditures while supporting accountability. 

Transparency and fairness

• Clear guidelines prevent misunderstandings about what constitutes an acceptable business expense.
• A detailed policy holds everyone accountable for their spending, leading to more responsible financial behaviour.

Your step-by-step guide to creating an expense policy template

Creating an expense policy template might seem daunting, but if you get it right it will save you a lot of time, money and headaches down the line.  
 
Here’s your 5-step process to create a robust expense policy template for your company: 

Step 1: Define expense categories

Start by outlining the types of expenses your employees might incur and categorise them. This helps in setting clear guidelines and avoiding confusion.

Common expense categories include:

• Travel expenses: flights, accommodation, meals, local transportation. 
• Office supplies: stationery, software, equipment. 
• Client entertainment: meals, event tickets, gifts. 
• Professional development: training, workshops, conferences.

Step 2: Set clear guidelines for allowable and non-allowable expenses 

Specify what’s covered under each category (including spend limits) and what isn’t. Make these guidelines clear and easily accessible to all your employees.

Examples of allowable expenses:

• Transport and travel: you can claim expenses for fuel, parking, or public transport when traveling for business. 
• Phone and internet bills: you can claim the part of your bills used for business purposes (i.e. sales calls to clients).

Examples of non-allowable expenses:

• Commuting: you can’t claim costs for traveling from home to your office. 
• Personal expenses: costs unrelated to your business aren’t claimable.

Step 3: Establish a simple process for approving and reimbursing expenses 

Outline a straightforward procedure for submitting, approving, and reimbursing expenses. 

• Define your roles: make sure you understand your responsibilities along with those of your employees and finance team in the approval process. 
• Establish deadlines: create submission deadlines to guarantee that everything is processed on time.  
• Clarify documentation needs: be clear about what types of proof (like receipts and invoices) you need to provide and the submission process for them. 
• Establish reimbursement timelines: let your employees know how long a reimbursement will take and how it will get paid (via payroll or check).

Step 4: Outline the requirements for managing documents and receipts

Make it clear what documentation is required for expense claims. This helps in maintaining accurate records and streamlining the approval process.

Types of documents to manage:

• Receipts: itemised receipts for all expenses. 
• Invoices: for any pre-approved large purchases. 
• Justifications: brief explanations for unusual or high-cost expenses.  

Storage requirements:

• Format: make sure all your documents are stored in the required format (i.e. digital or paper). 
• Retention duration: retain all documents for the legally required period (six years in the UK). 

Step 5: Update your policy regularly

An expense policy should evolve with your business. Regular updates will help make sure that the policy remains relevant and effective.

Here are some suggestions to help keep your policy up-to-date: 

• Review frequency: it is recommended to conduct a thorough review of your policy either annually or bi-annually. This allows you to assess its effectiveness and relevance in your industry. 
• Feedback loop: establish a systematic feedback loop by actively gathering insights from both employees and other stakeholders. This can be done through surveys, focus groups, or one-on-one discussions. 
• Policy amendments: based on the feedback collected and any significant changes in business operations, make the necessary amendments to the policy. This process should be transparent, enabling your team members to grasp the rationale behind any changes. 

Top tips when implementing a new expense policy

Communicate clearly

• Hold training sessions to explain the policy to all your employees. 
• Provide written documentation (like FAQs) that your employees can reference.

Enforce consistently

• Apply the policy uniformly to all employees to keep things fair. 
• Monitor compliance and address any violations promptly.

Review regularly

• Periodically review and update the policy to reflect changes in the business. 
• Gather feedback from your employees to identify areas for improvement. 

Keep it simple

• Use simple language and avoid jargon to ensure everyone understands the policy.  
• Limit the number of rules to make it easier for your employees to follow and remember. 

Implement expense management software to enforce policy compliance

Managing expenses manually can be cumbersome and error-prone. Here’s how expense management software like Capture Expense can help:

Automation and accuracy

• Automate the submission and approval process to reduce errors. 
• Guarantee accurate data entry and record-keeping every time.

Real-time tracking

• Track expenses in real time for better visibility and control. 
• Generate reports to monitor spending patterns and identify areas for cost-saving.

Policy enforcement

• Built-in controls make sure that expenses comply with your company policy. 
• Flag non-compliant submissions for review. 

Are you looking to streamline your expense submissions and approvals?

Book a personalised demo today to see how Capture Expense can help you keep your business expenses legitimate while ensuring your employees get reimbursed promptly.

 

Have you ever asked yourself: Are my corporate activities adding value? How do I understand if they’re adding ROI? If you have, you’re in luck. Because we’ve got the answers right here.   

Business entertainment expenses are valuable for building client relationships and enhancing team cohesion. When managed well, they boost productivity, employee satisfaction, and strengthen ties with clients and stakeholders. 

Let’s look at the difference between staff and business entertainment expenses, examples of each, and how to manage them effectively.

What’s the difference between staff and business entertainment expenses?

It’s vital to distinguish between these two types of expenses. They may sound similar, but they serve different purposes:

• Staff entertainment expenses: focus on team-building activities. These events aim to boost your team’s morale and improve employee relations. 

• Business entertainment expenses: target clients and prospects. They aim to maintain and strengthen business relationships.  

Common staff entertainment expenses

Staff entertainment expenses revolve around your current employees. Here are some examples:

• Office parties: celebrating achievements or company milestones can enhance workplace camaraderie. These events often include food, drinks, and sometimes even gifts!

• Team outings: activities like bowling or escape rooms encourage teamwork. They allow your employees to unwind and bond outside the office.

• Workshops and retreats: these events combine learning with leisure. They help your people develop new skills while enjoying a change of scenery.

Common business entertainment expenses

Business entertainment expenses aim to build and maintain positive business relationships with your customers. Here are some examples:

• Client dinners: hosting a dinner for your current or potential clients can foster trust. It’s an opportunity to discuss business matters in a relaxed setting.

• Corporate events: these events target a broader audience. They can include product launches, conferences, or networking functions.

• Golf days: inviting clients for a round of golf can strengthen relationships. It’s a chance to connect on a personal level while discussing business.

Are staff entertainment expenses tax deductible?

Yes, staff entertainment expenses are generally tax deductible.  
 
If you’re a VAT-registered business, you can also recover VAT on these expenses. However, HMRC only permits deductions for the cost of entertaining current employees on your payroll; former employees, subcontractors, and shareholders who do not work in the business do not qualify.  
 
If you host an event attended by both employees and non-employees, you’ll need to calculate and claim only the portion of the costs related to entertaining your employees (excluding any expenses for their guests). 

Are business entertainment expenses tax deductible?

No, business entertainment expenses are generally not tax deductible.  

HMRC views these expenses as non-essential to running your business. They are seen as a way to improve business relations rather than a necessary trade cost. 

“Expenditure on business entertainment or gifts is not allowable as a deduction against profits, even if it is a genuine expense of the trade or business.” — HMRC, Business Income Manual 

How to budget for your entertainment expenses

Setting a budget for entertainment expenses is simpler than you might think. By allocating 2-3% of your overall budget, you can make sure that you’re getting the most out of your spending while keeping your finances in check.  
 
Here’s how you can do it:

Calculate your available budget

Start by assessing your total budget for the quarter. Once you have that figure, calculate 2-3% to determine your entertainment allocation. This will be your guideline to follow throughout the quarter.

Be selective with your spending

Identify which events or entertainment costs are essential and which ones are optional. Focus on spending your budget on activities that provide the most benefit or enjoyment to your team or clients. 

If you’re unsure what your teams and clients will find the most valuable, all you have to do is ask! Gather verbal feedback, ask for thoughts over email, or send out a simple survey to help you better understand where to spend your budget.

Plan ahead

Schedule entertainment expenses for the quarter in advance. This allows you to take advantage of early bird discounts and avoid last-minute splurges that can disrupt your budget.

Track your spending

Keep an eye on your entertainment expenses to make sure you remain within the set allocation. Use simple tracking tools or expense tracking apps to monitor your spending in real time.

Evaluate and adjust

At the end of each quarter, review your spending: 

• Were there areas where you overspent?  

• Did certain activities provide less value than expected? 

Use these insights to adjust your strategy for the next quarter.

How to measure the success of your staff and business entertainment expenses

Making sure your business spends wisely on entertainment is crucial. You’ll need a clear strategy to see if these costs are worth it in the long-term.  
 
Here’s how you can do that:

Conduct a quarterly review of your entertainment expenses

Key metrics to consider:

• Return on Investment (ROI): look at the benefits gained from the expenses. Did they lead to more sales or better client relationships?

• Employee engagement: assess if these activities have improved staff morale or teamwork —happy employees often mean increased productivity.

• Client retention: did entertaining clients help in maintaining relationships? If so, this could be a good sign of success.

Make adjustments

Use the data from your quarterly review to tweak future plans. Ask yourself: are there certain activities that provide better returns?  
 
You should also consider asking for feedback from employees and clients about the events and activities. This will provide insights into what worked and what didn’t.

Implementing policies and procedures

Start by defining what counts as acceptable business entertainment, including specific categories, limits, and the types of activities that qualify. This clarity eliminates confusion and ensures that everyone understands the parameters. 
 
Then, set up an approval process where employees must get pre-approval for major expenses, explaining the business purpose and expected results. This encourages accountability and promotes transparency. Hold regular training sessions to keep staff informed about these policies. 
 
Schedule regular audits to check compliance and make changes as needed based on feedback and new regulations. Consider using intuitive expense management software to simplify reporting and provide real-time spending insights. 
 
By taking these steps, you’ll create a robust framework that supports effective management of business entertainment expenses, ultimately reinforcing your organisation’s financial health and compliance standards. 

All your staff and business entertainment expenses in one place with Capture Expense

Gain real-time insights, maintain budget control, and effortlessly monitor staff and entertainment expenses. Book a demo today to see how you can make better financial decisions!