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What Does T&E Mean? And How to Streamline your Entire Process

There’s nothing quite like a business trip. Exploring new cities, meeting interesting people, and learning new things. It’s a great way to break up the monotony of the daily grind and add some excitement to your work life. 

But let’s be honest. Nothing quite kills that refreshed, post-trip feeling like coming home to the task of filing a travel expense report. All those receipts, mileage logs, and itemised lists can feel tedious. Necessary? Absolutely. Exciting? Not so much. It’s the paperwork price you pay for all those moments of professional adventure. 

What if we told you that you could manage all your travel and expenses (T&E) in a matter of minutes? What if we told you the whole process could be fully digitised and automated?

Now that we’ve got your attention. Let’s look at what T&E means, some key examples and how you can streamline your entire travel and expense management process.  

What does T&E mean?

T&E refers to the costs incurred by employees or individuals when traveling for business purposes. These expenses typically include transportation, accommodation, meals, and other incidental costs necessary to carry out their work-related duties while away from their usual workplace. 

T&E examples

There’s a lot that can fall under the umbrella of T&E. Let’s break it down:

Transportation 

This includes the big things, like booking flights, train tickets, or renting a car to get to your destination. It also covers smaller, day-to-day transport expenses like taxi rides, parking fees, or public transport passes if you’re getting around in a city.

Accommodation

Your stay is a key part of the budget, whether it’s a hotel, serviced apartment, or Airbnb. Beyond the nightly rate, it might also include any Wi-Fi fees or charges for using business facilities, like meeting rooms—make sure you make it clear in your T&E policy whether this will be included, or comes at the employees own cost.

Meals

Everyone’s got to eat, right? This includes dining out at restaurants, grabbing a quick bite at a café, or ordering room service. Don’t forget about snacks and drinks during the day or those team dinners that turn into great networking opportunities. There’d usually be a set spend limit on how much an employee can claim depending on length of their trip and what meal of the day it is; so make sure this is totally clear before you go out for that gourmet, 3-course meal.

A real-world example

Imagine you’re a sales rep for a tech company. You’re scheduled to fly to San Francisco for a big three-day conference. You book your flight, reserve a hotel room, and rent a car to get around the city. While you’re there, you’ll need to cover the cost of meals and any additional transportation expenses.  
 
All of these costs combined would be considered T&E expenses. 

6 T&E challenges and how to solve them

Manual processes 

Processing your travel and expenses manually might seem manageable at first, but it quickly becomes a bottleneck as your business grows. Manual processes are time-consuming, prone to errors, and can lead to your finance teams spending excessive time reviewing claims.

The solution: you should consider automating your entire travel and expense process with a sophisticated expense management system like Capture Expense. It will help you streamline everything from receipt capture and expense submission to policy enforcement and approval workflows—saving time and providing greater control over your expenses. 

Policy non-compliance 

This is a major challenge in managing your travel and expenses because it can lead to overspending and inconsistent claims for your business. Sometimes your employees may not fully understand the policies, or they might accidentally—or even deliberately—submit claims that don’t align with company guidelines.  

So, if you’re wondering whether you need a corporate travel policy. The answer is yes. A robust T&E expense policy is like a roadmap for your business trips. It sets clear guidelines on what expenses are reimbursable, how much you can spend, and what kind of documentation is required.

To help you get started, you can
download our free corporate travel policy template. 

Lost receipts 

When it comes to T&E expenses, lost receipts are a huge headache for everyone involved. Your employees can’t claim reimbursements without proof of purchase, your finance teams can’t process the expense, and your managers end up chasing people for missing details.

So, why does this happen so often? Think about it—when you’re traveling, you’re juggling trains, meetings, meals, and taxis. Receipts get crumpled, misplaced, or accidentally tossed out. If you’re relying on manual systems, the problem only gets worse because there’s no backup unless someone took the time to snap a photo or make a note.

The solution? Whether you’re handling finances manually or digitally, it starts with making it easy to capture receipts right away. If you’re sticking to a manual process, encourage your employees to use their phones to take pictures of receipts the moment they get them. For a truly effective solution, though, modern expense management apps are the way to go. They let your employees snap, upload, and categorise receipts in seconds, even while they’re on the move. The data is automatically synced to your accounting system, so there’s no risk of losing it—and no more chasing people for missing paperwork. 

Budget overspending 

Overspending can spiral out of control fast. A little extra here for a last-minute hotel upgrade or an unplanned meal there might seem harmless, but multiply that across dozens of employees and trips, and you’ve got a major dent in your budget.

The problem usually comes down to a lack of visibility and control (but more on that later). If your employees don’t have clear spending limits or real-time guidance on what’s allowed, they might unintentionally exceed budgets. And if your finance teams only see expenses after the trip is over, it’s too late to fix the problem.

The way to deal with budget overspending is proactive planning and real-time oversight. Start by setting clear budgets and policies for travel expenses, so your employees know exactly what’s acceptable.  

Consider bringing in a tool that helps enforce those guidelines in real time. Robust expense management platforms can flag out-of-policy spending instantly, give your employees budget updates on the go, and even alert your managers if someone’s about to exceed limits.

This way, you’re not just reacting to overspending—you’re preventing it before it happens. 

Delayed reimbursements 

Imagine spending your own money on a work trip—flights, meals, taxis—only to wait weeks or even months to get it back. It’s frustrating, especially if the expenses were significant.

For your finance teams, delayed reimbursements are a sign of inefficiency. Processing piles of expense reports, chasing missing receipts, and manually checking for policy compliance takes forever. The longer it takes, the harder it is to manage cash flow and keep your employees happy. 

So, what’s the answer? It all comes down to speed and automation. An expense management system can simplify your entire process. Employees can submit expenses in real time—by snapping a photo of a receipt—and finance teams get all the data they need in one place.  

Poor visibility into spending patterns 

Think about trying to manage all your company’s finances with a pen and paper. It’d be a lot of work, and easy to make mistakes. That’s kind of what it’s like using manual spreadsheets or legacy software for your T&E expense reports.

These outdated methods can’t automatically check if your expenses are within policy limits or if you’ve got the right receipts. It’s all up to you to do the calculations and spot any errors. And let’s be honest, human error is inevitable.

You’re in luck because the solution here, is the same one as all the others: a modern, fully automated expense management system. Tools like Capture Expense can automatically categorise expenses, flag policy violations, and generate accurate reports in real time.  

Are you looking for a platform that can streamline your entire T&E process?

With just a few taps, you can capture receipts, automate employee reimbursements, and manage everything else with ease. Book a demo today and see how we can help streamline your entire T&E process.

A Guide to Out-of-Pocket Expenses

Having a corporate credit card is great. You can tap away, and purchases are charged directly to your company’s account.  

But sometimes — especially if you run a smaller business — you won’t have corporate cards, and in that case, you’ll have to pay for business expenses yourself (or “out-of-pocket”). 

The downside of paying for things out of pocket (besides the obvious) is that the logging, tracking and reimbursing of these costs can be time consuming.

That’s why you need to have a good system in place, so all these little expenses don’t turn into big headaches down the line.

Let’s start with a definition for out-of-pocket expenses and work our way to successfully managing them.

What are out-of-pocket expenses?

Out-of-pocket expenses are costs you pay yourself for work-related activities. Think of them as money you spend upfront, often with the expectation of being reimbursed later.

Common examples of out-of-pocket expenses

Here are some common examples of out-of-pocket expenses:

  • Work-related travel costs: like paying for fuel, parking, or tolls during a business trip.
  • Meals: grabbing lunch or dinner for a client, or while travelling for work.
  • Office supplies: picking up stationary, notebooks, or other essentials when your company runs out.
  • Accommodation: costs for hotel stays or other forms of accommodation during business trips.

Basically, it’s anything you pay for upfront that someone else is supposed to cover later! That’s right, the examples are endless. 

Let’s look at a real-world scenario

Imagine you’re travelling for a work conference in another city. Your company’s travel department has booked your flight and hotel, but when you arrive at the airport, you realise you’ll need to take a taxi to the hotel. You pull out your wallet and pay for the ride yourself since it’s not prepaid.

Later, you keep the receipt and submit it to the travel department for reimbursement. That taxi fare is an out-of-pocket expense because you paid for it upfront, even though it’s technically a business expense. 

How to manage outofpocket expenses

First things first, you need to ask yourself whether you plan on managing your out-of-pocket expenses digitally or manually. There are pros and cons to each method (which we’ll cover shortly) but generally if you can digitise any part of your workflow, it’s usually worth doing.

Digital vs manual: how should you manage your outofpocket expenses?

 

Managing your outofpocket expenses digitally

Pros  Cons 
Convenience: you can track your expenses on the go with just a few taps on your phone. No need to carry around notebooks or receipts.  Costs: while many apps are free, some of the more advanced features or premium versions come with subscription fees. 
Organisation: digital tools often categorise expenses automatically (e.g., meals, travel), making it easier to understand where your money is going.  Learning curve: some apps can be tricky to set up or use, especially if you’re not tech-savvy. 
Accuracy: you’re less likely to forget an expense since you can log it in real time. Plus, the calculations are automated, so no human errors.  Potential for overcomplication: if you’re not careful, you might end up spending more time fiddling with the app than actually managing your finances effectively. 
Access to insights: many apps provide spending trends, budgeting tools, or even advice to help you save money.   
Eco-friendly: less reliance on paper receipts or physical records is better for the environment — which is always a bonus.   

Managing your outofpocket expenses manually

Pros  Cons 
No tech needed: no need for apps, phones, or internet. A pen and notebook (or even receipts in an envelope) are all you need.  Time-consuming: let’s face it—tracking everything by hand can be a bit tedious, especially if you have a lot of small transactions. 
Simplicity: for some, writing things down feels more straightforward than navigating through digital menus and options.  Prone to errors: it’s easier to miscalculate or forget to log an expense if you’re doing it manually. 
Mindful spending: the act of writing each expense down can make you more conscious of your spending habits.  No automated insights: you miss out on features like expense categorisation, or spending trends that digital tools provide effortlessly. 
  Not portable: carrying a notebook everywhere can be inconvenient compared to using a smart device. 

Let’s look at the steps you need to take to manage your out-of-pocket expenses effectively:

Step 1: Record your out-of-pocket expenses as soon as they happen

Don’t let your receipts stack up—it’s a disaster waiting to happen.

If you’re using a sophisticated expense management platform like Capture Expense, all you have to do is snap a photo of your receipt, and let the software do the heavy lifting for you. It’ll extract all the necessary details and send them straight to your accounting system.

Prefer manual entry? That’s okay too! Just make it a habit to jot down expenses as soon as you can—whether in a notebook or spreadsheet. 

If immediate logging isn’t realistic (even if it’s just a case of taking a quick picture), set a weekly or monthly calendar reminder to process your expenses.

Step 2: Categorise your business expenses

Categorising your business expenses is key. Think of it like sorting your clothes into different drawers. You wouldn’t just throw everything into one pile, right?

Here’s how to categorise your expenses:

  1. Create a system: divide your expenses into different categories that are specific to your industry and the way you do things. 
  2. Stay consistent: once you’ve established your categories, stick to them. This will make it easier to track your spending and identify trends. 
  3. Use software to automate the entire process: while some providers offer this service, Capture Expense’s AI-powered matching feature is a game-changer when it comes to categorising your expenses. Whenever you upload receipts, or process corporate card transactions in the app, it automatically assigns the correct expense category.  

Some common examples of business expense categories

Here are some of the most common business expense categories. Pick and choose which ones you think will be a good fit for your specific company:

  • Travel    
  • Meals and entertainment 
  • Advertising and marketing  
  • Office supplies   
  • Utilities   
  • Employee benefits    
  • Training and development  

Step 3: Keep track of all your receipts 

Don’t let your receipts slip through the cracks! Whether it’s a physical receipt or a digital one, make sure to keep them safe.

They’re your proof of purchase and are crucial for:

  • Reimbursements: if you’ve paid out of pocket, the receipt is what you’ll use to get your money back.
  • Tax time: if you’re deducting business expenses, HMRC might ask to see proof. Without receipts, you could lose out on valid deductions.
  • Audits: no one likes the word, but audits happen. Keeping receipts guarantees you’ve got all your ducks in a row if your finances are ever questioned. 

Step 4: Consider prepaid or company credit cards

Let’s talk about why prepaid or company credit cards can be a game-changer for managing out-of-pocket expenses.

Here’s the thing: paying for work-related stuff with your own money can get messy. You’re dipping into your personal funds, trying to remember what needs reimbursement, and it can take forever to reconcile everything. That’s where prepaid or company credit cards come in. 

Here are 4 reasons why you should consider them:

No more out-of-pocket spending

Imagine this, instead of paying for that client lunch or travel ticket from your own pocket, you just use the company card. No personal funds are involved, so there’s no waiting around for reimbursement.

Better cash flow management

Prepaid cards, in particular, let you load a set amount of money each month. It’s like giving yourself or your employees a spending allowance that’s easy to track. Plus, since it’s prepaid, there’s no risk of overspending.

Simpler tracking

Every transaction on the card is automatically recorded. You can pull up the statements to see exactly what’s been spent and where—no more hunting through receipts or cross-referencing expenses with personal accounts.

Reduces admin burden

If you’re managing a team, prepaid or company credit cards eliminate the need for employees to pay out of pocket and then submit reimbursement forms. It streamlines the whole process.

For example

Say you run a small business and one of your employees needs to buy materials for a project. If they use their own money, they’ll need to file an expense claim, provide receipts, and wait for reimbursement—meanwhile, you’re stuck processing all of it. 

Now, if they have a prepaid card loaded with £500 for project expenses, they can use that directly. No personal money involved, no reimbursement headaches, and you’ve already capped how much they can spend. 

Things to watch out for

  • For prepaid cards: make sure you top them up as needed and monitor balances to avoid any “insufficient funds” hiccups.
  • For credit cards: pay the balance in full each month to avoid interest charges. And if multiple employees are using them, set clear spending guidelines to prevent misuse. 

Step 5: Review your out-of-pocket expenses  

Reviewing your out-of-pocket expenses regularly is like giving your finances a quick health check—it helps you stay on top of things and avoid surprises. 

Catch forgotten expenses 

It’s easy to forget small things like a coffee for a client meeting or a parking fee. When you sit down regularly (say, once a month), you can check receipts, bank statements, or your expense management app to make sure nothing’s been missed. 

Spot patterns in spending

When you review expenses, you start to see where your moneys going. Are you spending more than expected on travel? Is your coffee budget out of control? Regular reviews let you spot trends and decide if adjustments are needed. 

Stay prepared for taxes or audits

Keeping everything up to date means that when tax season rolls around (or if there’s ever an audit), you’ve got your expenses clearly documented. No scrambling for receipts or trying to remember what that £30 charge was for six months ago. 

Are you on the lookout for an app that can simplify and automate your out-of-pocket expenses?

If managing out-of-pocket expenses feels like a chore, Capture Expense is here to change that. With our app, you can snap receipts, categorise expenses, and let the automation handle the rest—no more manual logging or misplaced receipts.

Book a demo today to see how we can save you time, simplify your process, and give you back control of your finances.  

 

A Guide to Expense Compliance in the UK

Did you know 43% of senior finance leaders are very concerned about HMRC inspections? 

That means that nearly half of all CFOs, Finance Directors, and Heads of Finance feel apprehensive or underprepared for an unexpected visit from the taxman. 

And maybe that’s partly because expense compliance in the UK is complex, and can be time-consuming. But the trick is having a robust policy in place to make staying compliant just that little bit easier.

Now before you can create your company expense policy, and implement processes for complying with HMRC, you need to know what’s expected of you.

Let’s shine some light on some of the main areas to focus on to make sure you keep the taxman at bay. 

What do HMRC expect from you?

If you have an HMRC compliance check, they’ll review your entire expense compliance process for non-compliance with HMRC expense regulations.  
 
Their primary focus is to make sure that you have:  
 
• A clear and enforced policy  
Appropriate approval processes  
Comprehensive documentation  
Appropriate checks and controls  
Full compliance with Tax and VAT requirements  
• A robust and secure payment process

The VAT rates in the UK

VAT (or Value Added Tax) is a tax added to the price of most goods and services in the UK.

If you’re a business owner, you’ll need to register for VAT if your taxable turnover exceeds £90,000 in a 12-month period. 

Once registered, you’ll charge VAT on your sales and reclaim the VAT you’ve paid on your purchases.  

Here are the VAT rates for 2024: 

  % of VAT  What the rate applies to 
Standard rate  20  Most goods and services 
Reduced rate  5  Some goods and services, e.g. children’s car seats and home energy 
Zero rate  0  Zero-rated goods and services, e.g. most food and children’s clothes 

 When you mustn’t charge VAT

There are certain goods and services that are exempt from VAT. This means you won’t charge VAT on these items — even if you’re VAT-registered.

Some examples of VAT-exempt items include:

  • Financial services: banking, insurance, investments. 
  • Healthcare and medical treatments: doctor’s visits, prescriptions. 
  • Education and training: school fees, university tuition. 
  • Charity services: charitable donations, fundraising events. 

You can also access HMRC’s full list of VAT exempt goods. 

Remember, even though you don’t charge VAT on these items, you still need to keep track of them in your business records. 

Expense compliance when it comes to vehicle mileage 

Did you know that your employees can claim back time spent traveling for work? 

That’s right, by following HMRC’s mileage rates, you can empower your employees to claim back vehicle expenses incurred for business purposes.

Here are the mileage allowance rates for 2024:

Type of vehicle  10,000 miles  10,000 + miles 
Cars and vans   45p  25p  
Motorcycles   24p  24p  
Bikes  20p   20p  

 What are HMRC’s advisory fuel rates?

HMRC’s advisory fuel rates apply to company-owned cars and serve two main purposes:

  1. Reimbursing your employees for business travel expenses incurred in a company car.  
  2. Managing reimbursements when your employees use a company car for personal travel and need to repay the business.  

Here are the advisory fuel rates for 2024:

Petrol

Engine size (cc)  Mean MPG  Fuel price (per litre)  Fuel price (per gallon)  Rate per mile  Advisory fuel rate 
Up to 1400  51.0  143.4 pence  652.0 pence  12.8 pence  13 pence 
1401 to 2000  42.3  143.4 pence  652.0 pence  15.4 pence  15 pence 
Over 2000  27.1  143.4 pence  652.0 pence  24.1 pence  24 pence 

Diesel

Engine size (cc)  Mean MPG  Fuel price (per litre)  Fuel price (per gallon)  Rate per mile  Advisory fuel rate 
Up to 1600  56.9  149.1 pence  677.8 pence  11.9 pence  12 pence 
1601 to 2000  49.3  149.1 pence  677.8 pence  13.8 pence  14 pence 
Over 2000  38.0  149.1 pence  677.8 pence  17.8 pence  18 pence 

 LPG (Liquefied Petroleum Gas) 

Engine size (cc)  Mean MPG  Fuel price (per litre)  Fuel price (per gallon)  Rate per mile  Advisory fuel rate 
Up to 1400  40.8  98.3 pence  446.9 pence  10.9 pence  11 pence 
1401 to 2000  33.8  98.3 pence  446.9 pence  13.2 pence  13 pence 
Over 2000  21.7  98.3 pence  446.9 pence  20.6 pence  21 pence 

 Electric

Electrical efficiency — miles per kilowatt-hour  Domestic electricity cost (per kilowatt-hour)  Rate per mile  Advisory electric rate 
3.59  26.42 pence  7.36 pence  7 pence 

 How to reclaim VAT on fuel

If you’re VAT-registered, you can often reclaim the VAT you’ve paid on fuel costs.

However, there are a few conditions:

  • Business use: the fuel must be used for business purposes. This could be for company vehicles or employee reimbursements for business mileage.
  • Accurate records: you’ll need to keep detailed records of your fuel purchases, including receipts and mileage logs. 

There are two ways you can reclaim VAT on fuel:

  1. Reclaim all the VAT paid on fuel purchases and pay the appropriate fuel scale charge for your vehicle.  
  2. Claim VAT only for the fuel used during business trips by maintaining thorough mileage records to demonstrate usage exclusively for business purposes.  

Expense compliance around carbon reporting

From July 2025, you’ll be required to provide more detailed information about your sustainability practices and climate related risks. 

This means if your business meets certain criteria, such as having a significant turnover (exceeding £500 million) and employee count (at least 500), you’ll be required to report on your carbon emissions.

You’ll need to:

  • Track your carbon footprint: monitor your direct emissions (Scope 1) and indirect emissions from purchased energy (Scope 2).
  • Assess your supply chain: evaluate the carbon footprint of your suppliers and consider ways to reduce emissions throughout your supply chain (Scope 3).
  • Set reduction targets: establish clear targets for reducing your carbon emissions and develop a plan to achieve them. 

What you need to know about tax compliance 

When it comes to tax compliance, we know the number one question on your mind: are reimbursed expenses taxable in the UK? 
 
The short answer is no. If expenses are wholly, exclusively, and necessarily incurred in the performance of your job, they aren’t taxable. 
 
For example, if you’re a salesperson and your job requires you to travel to meet with clients. Any expenses you incur, such as travel costs, accommodation, and meal expenses, can usually be reimbursed tax-free. 

Are there any exceptions? 

Yes, if the expenses aren’t classed as “work-related”, or if they’re seen as providing a personal benefit. 

Here are a couple of examples:   

  • Excessive or extravagant expenses: if your expenses are deemed unreasonable or excessive, they may be considered taxable income.  
  • Personal expenses: reimbursements for personal expenses, such as commuting to and from work, are generally taxable. 

We know it can be tricky, but knowing the difference between deductible and non-deductible expenses can significantly impact your financial planning and tax liability.  

What you need to know about corporation tax

If you’re setting up a limited company in the UK, you’ll need to register for corporation tax within three months of starting your business.

This tax is applied to your company’s profits, investments, and any gains from selling assets.

Here’s a breakdown of the 2024 rates:

  • Small profits rate (companies with profits under £50,000): 19%
  • Main rate (companies with profits over £250,000): 25%

What you need to know about National Insurance Contributions   

National Insurance Contributions (NICs) are essentially taxes on earnings that help fund state benefits like the NHS and State Pension.  
 
If you’re a business owner in the UK, you’ll need to understand the different types of NICs and how they apply to your business:

Class 1 NICs

  • Employee NICs: deducted from your employees’ wages. 
  • Employer NICs: paid by you, on top of your employees’ wages.

Class 1A NICs

Class 1A NICs are a type of tax that you pay on certain benefits you provide to your employees.

These benefits, often called “Benefits in Kind (BIK)” can include things like:   

  • Company cars: if you provide your employees with company cars, you’ll need to pay Class 1A NICs on the benefit value of the car.  
  • Private healthcare: if you offer private health insurance to your employees, you’ll also need to pay Class 1A NICs on the cost of the insurance.  
  • Accommodation: if you provide accommodation for your employees, such as a company flat or house, you’ll need to pay Class 1A NICs on the benefit value of the accommodation. 

Why you need to create an expense policy 

A company expense policy is like a roadmap to expense compliance. It outlines what expenses are reimbursable, how much you can claim, and what documentation you need to provide (for your company or HMRC).

By having a clear and concise policy in place, you can make sure that your employees understand the rules and submit accurate expense claims. 

To help you get started you can download our free expense policy template. 

How to report your expense reimbursements to HMRC

You have a couple of options to choose from when reporting the reimbursement of expenses

  • You can use a P11D form to report your expenses and benefits to HMRC at the end of the tax year. 
  • You can opt for payrolling, where you include the value of the expenses and benefits in the employee’s pay.  

It’s worth noting that starting from April 2026, all BIKs that you provide (except for loans and living accommodation) will have to be reported and taxed through payroll.

Your 6-step guide to HMRC expense compliance

1. Understand the rules

2. Keep detailed records

  • Keep all receipts for expenses — no matter how small. 
  • Maintain a mileage log: if you use your car for business, keep a detailed record of your mileage. 
  • Document the business purpose: explain why each expense was necessary for your job.

3. Categorise your expenses

  • Clearly distinguish between expenses incurred for business purposes and those for personal use. 
  • Use appropriate expense categories (e.g., travel, accommodation, meals, office supplies).

4. Claim the right amount

  • Make sure that your expense claims are in line with HMRC’s rules and regulations. 
  • Only claim for reasonable and necessary expenses.

5. Submit your claims on time

  • Follow your company’s specific procedures for submitting expense claims. 
  • Don’t delay in submitting your claims to avoid potential issues. 

6. Choose an expense management system that fully complies with HMRC

A sophisticated expense management system like Capture Expense will help you automate the process, reduce errors, and comply with HMRC regulations.  

You need to Look for a system that can: 

  • Automatically calculate mileage claims based on HMRC rates 
  • Generate accurate expense reports 
  • Integrate with your accounting software 
  • Provide real-time insights into your spending habits 
  • Offer robust audit trails for expense compliance purposes 

Do you still need help with expense compliance?

Book a personalised demo today and we’ll help you with all your expense compliance needs. There’s not a mileage query we can’t handle, or a tax problem we can’t solve.

Expense Categories: The Different Types of Business Expenses

What’s the one thing all businesses have in common? They’re all chasing the elusive “work-life balance.” No, well probably, but the answer is: they have to keep track of the money that’s coming in and the money that’s going out. 

And you’re no different. If you don’t keep track of your business expenses, you risk running into financial trouble. It’s like trying to drive a car without looking at the fuel gauge – eventually, you’ll run out of gas and get stranded. 

The trick is you need to be able to identify and accurately categorise your business expenses. 

Let’s take a look at the different types of business expenditures, which expense categories they fall into, and most importantly, how you can categorise your business expenses.

The different types of business expenses

It’s pretty black-and-white when it comes down to it, you have deductible and non-deductible expenses.

Deductible expenses can be subtracted from your taxable income, reducing your overall tax liability. Non-deductible expenses, on the other hand, can’t be deducted from your income. 

Examples of deductible expenses

  • Travel expenses: you can claim expenses for fuel, parking, train, or bus fares if the travel is for business purposes. 
  • Office expenses: these include costs like rent, utilities, office supplies, and equipment. 

Examples of non-deductible expenses

  • Personal expenses: costs that aren’t directly related to your business, such as personal travel or entertainment. 
  • Fines and penalties: costs incurred due to legal violations or non-compliance with HMRC. 

What are business expense categories?

Business expense categories are basically different groups that help you organise your finances. 

You need to bear in mind that they aren’t one-size-fits-all – different businesses have different categories based on what they do. 

For example, if you run a restaurant, your categories might include rent (for your restaurant), wages (for your kitchen staff/bar staff) and inventory (for your food and drink orders). 

If you run a software company, your categories will be totally different. These could include research and development, marketing, and security. 

With that in mind, you’ll need to create expense categories that suit your business and the industry you’re in.  

The 10 most common types of business expense categories

To help you get started, we’ve outlined some of the most common business expense categories. Pick and choose which ones you think will be a good fit for your specific company:

  • Salaries and wages  
  • Employee benefits   
  • Training and development 
  • Rent  
  • Utilities  
  • Office supplies  
  • Insurance   
  • Advertising and marketing  
  • Travel   
  • Meals and entertainment

How to categorise your business expenses

Categorising your business expenses doesn’t have to be too complicated. Here’s our easy to follow four-step guide: 

Step 1: Identify your business expense categories

It’s a bit of a no-brainer, but as we already covered above, you should start by thinking about the different areas where your money is spent.  

You’ll want to categorise expenses that directly, and indirectly, relate to your business operations. 

Next, break them down by what makes sense for your business—this might include categories like travel, rent, insurance, and more.

Step 2: Choose a tracking method

Next, you’ll need to decide how you’ll keep tabs on these expenses.  

If you prefer a hands-on approach, you might track everything in a spreadsheet, where you can manually enter each transaction. But if that’s a bit too old school for you, you can automate the process to save time. 

Accounting software like QuickBooks or sophisticated expense management platforms like Capture Expense can do much of the heavy lifting for you.  

These tools automatically categorise many expenses, and you can tweak the categories as needed.

Step 3: Schedule regular reviews

It’s not enough to just track expenses—you need to keep on top of them.  

Make it a habit to review your financial accounts regularly, whether it’s once a month or every quarter. During these reviews, check that all transactions are recorded correctly and reconcile your accounts to make sure everything adds up.  

This way, you’ll catch any discrepancies before they become bigger problems.

Step 4: Assign expense categories to each transaction

As you go through your transactions, make sure each one is assigned to the correct category. This may feel tedious, but it’s key to generating accurate financial reports. 

Over time, this categorisation will help you spot trends in your spending and see where you can make adjustments

Automate your expense categories with AI-powered category matching 

Capture Expense’s AI-powered matching feature is a game-changer for your finance teams. Whenever you upload receipts or process corporate card transactions in the app, it automatically assigns the correct expense category. 
 
Book a demo today if you want to automate your business expense categories.

Best Expense Management Software Solutions 2024

Selecting an expense management solution to track and handle all your company’s requirements is an essential and strategic choice. To help you make the right decision for your business, we’ve compiled a list of the best expense management software solutions in the UK for 2024 so that you can find the best product for you, your team and your business.

What is expense management software?

What do you need from your expense management software?

Top 10 best expense management software solutions 2024

What is expense management software?

Expense management software allows you to save valuable time and money by automating your expense approval process.

The right expense management tool will allow you to track, process, and reimburse employee expenses and simplify the submission of claims for costs such as travel, meals, or supplies, while ensuring your teams comply with your policies.

What do you need from your expense management software?

Relying on old fashioned expense management processes, paper receipts and spreadsheets could be costing you time, money and energy.

Not all solutions are built equally, but the best will come equipped with features such as:

Corporate card reconciliation

Link your business cards to your expense management solution and escape the tedium of manual reconciliation. A good tool should capture and categorise transactions automatically and in real-time.

Vehicle mileage tracking

Your expense management tool should create accurate travel logs for every journey your team may take and the best tools will help you to report on the carbon emissions generated, allowing you to reduce your carbon footprint.

Receipt scanning

Say goodbye to the paper trail with  a receipt scanner which can extracts your team’s spend data in real-time and automatically generates expenses—so you don’t have to.

Reimbursements

The right tool will offer automated reimbursements for your team, allowing you to effortlessly create and submit expenses with justa few clicks.

Reporting

Gain valuable insights into into spending trends, budget adherence, and potential savings.

Integrations

Whether you’re using Xero, QuickBooks, Sage or any other accounting software, you should look for software that seamlessly integrates with your existing system

Compliance

Ensures that your organisational rules are enforced in real time, look for a system which can automatically flag any out-of-policy expense claims and avoid both costly oversights and compliance headaches.

Top 10 Best Expense Management Software Solutions in the UK 2024

Capture Expense

Capture Expense is the ultimate expense management software for simplifying corporate spend and boosting your bottom line. Capture Expense allows businesses to efficiently track and report expenses, providing clear and comprehensive insights into their financial activities.

Features:

  • AI Powered reporting: Get instant detailed breakdowns of spending by mileage, user, total expenditure, and more.
  • Fully customisable: Tailor your solution to your existing team, processes and schedule.
  • Receipt scanning: Simply snap a photo of your receipt, and our intelligent system takes care of the rest.
  • WhatsApp integration: WhatsApp Integration ensures effortless expense submission for everyone, regardless of their location or device.
  • Global support: Empower your teams to spend anywhere, any time with the expense management system built especially for international spending.
  • Automated reimbursements: Approve your teams’ submitted expenses on-the-go or at-your-desk, with full functionality on both mobile and desktop.
  • Business Mileage Tracking: Create seamless and accurate travel logs as our powerful APIs record journeys and distance on your team’s behalf.
  • Proactive HMRC and VAT compliance: We consistently update our tax and fuel rates with HMRC guidelines, and you have the flexibility to record personalised business rates.

Book a demo with Capture Expense

Moss

Moss is a comprehensive expense software platform tailored for small to medium-sized businesses (SMBs), offering features like customisable employee cards with adaptable spending limits and approval workflows.

Features:

  • Customisable employee cards: Adaptable spending limits and approval workflows.
  • Budget visibility: Full oversight of budgets for better cost control.
  • Integration with accounting software: Automated month-end closings with real-time syncing and spending categorisation.

Learn more

Expensein

ExpenseIn is a powerful and user-friendly expense management platform designed to simplify tracking, approval, and reporting of business expenses.

Features:

  • Automatic receipt scanning: Reduces manual data entry.
  • Compliance enforcement: Flags policy errors and discrepancies.
  • Real-time notifications: Managers can approve or reject expenses from anywhere.

Learn more

Pleo

Pleo offers both virtual and physical cards for business, which employees can use for in-person or online purchases, and Pleo’s app automatically categorises spending and simplifies the receipt submission process.

Features:

  • Automation of business spending: Manages reimbursements, mileage, and subscriptions.
  • Virtual and physical cards: Employees use for in-person or online purchases.
  • Automatic categorisation: Simplifies receipt submission via app uploads.

Learn more

Rippling

Rippling’s expenditure app excels at managing global spending, supporting inputs and reporting in over 130 currencies while reimbursing employees across more than 100 countries.

Features:

  • Global spending management: Supports over 130 currencies and employee reimbursements in 100+ countries.
  • Automated approval chains: Updates automatically as organisational structures change.
  • Customised policies: Enforce specific rules with minimal manual oversight.

Learn more

Tide

Tide Credit Cards offer businesses an easy and efficient way to manage company spending by issuing team members personal business cards with set spending limits.

Features:

  • Personal business cards: Employees receive cards with set spending limits.
  • Real-time tracking and control: Integrated with the Tide app for live updates.
  • Streamlined approvals: Simplifies transaction approvals and record-keeping with accounting tools.

Learn more

Navan offers automated categorisation, real-time visibility, and streamlined reconciliation, reducing the manual burden on finance teams.

Features:

  • Automation: Categorisation, real-time visibility, and reconciliation reduce manual effort.
  • ERP integration: Seamless data transfer with existing systems.
  • Compliance support: Automatically flags out-of-policy transactions.

Learn more

Zoho Expense

Zoho Expense supports multi-currency and multi-location capabilities, which is particularly useful for global businesses and integrates seamlessly with other Zoho products, such as Zoho Books and Zoho CRM.

Features:

  • Travel and expenditure management: Automates processes for efficient tracking.
  • Multi-currency and multi-location support: Ideal for global businesses.
  • Integration with Zoho and third-party tools: Works with Zoho Books, Zoho CRM, QuickBooks, Xero, and Microsoft 365.

Learn more

Payhawk

Payhawk is an all-in-one platform integrating features like mileage tracking, corporate cards, invoice management, and multi-entity management, with customised approval chains, spend policies, and real-time reporting.

Features:

  • All-in-one platform: Includes mileage tracking, corporate cards, and invoice management.
  • Automatic categorisation and VAT calculation: Reduces manual effort.
  • Customised approval chains: Set up spend policies and get real-time notifications for better control.

Learn more

Expensify

Expensify enables users to automate the creation of reports through features like SmartScan, which allows employees to simply snap a photo of receipts for automatic transcription.

Features:

  • SmartScan: Allows employees to snap photos of receipts for automatic transcription.
  • Credit card linking: Transactions are imported directly for easier tracking.
  • Automated approvals and next-day reimbursements: Fast, accurate payment processes.

Learn more

Need to know more?

A great expense management tool should save you time, money and energy, the examples above can help but we also know you may have more questions.

If you need to know more, feel free to take a product tour or book a demo with our team today.

What is Discretionary Expenditure?

When it comes to running a business there are some areas where you have zero wiggle room: paying your invoices, your staff, and your taxes.

Now if you’ve had a strong quarter and are sitting on a healthy cash surplus, you might consider allocating funds towards discretionary expenses. This could include upgrading your software, improving your marketing efforts, or offering additional employee benefits—expenditures that, while not essential, can drive growth and improve long-term business performance.

Let’s take a look at what exactly is discretionary expenditure, some key examples, and how you can effectively manage it.

What is discretionary expenditure?

Discretionary expenses are costs that aren’t essential for keeping your business afloat.

They’re flexible expenses that can be adjusted, or removed entirely, without affecting your core operations. They often vary by department, such as marketing, HR, or sales ops, and include things like extra employee perks, business entertainment expenses, or mileage reimbursement. 

…basically, it’s a fancy way of saying non-essential expenses. 

What’s the difference between discretionary expenditure and non-discretionary expenditure? 

It’s pretty simple, with discretionary spending you can be creative, open-minded, and even impulsive. With non-discretionary expenditure, not so much. 

Examples of discretionary expenditure

As you know by now, discretionary expenditure is essentially spending that isn’t strictly necessary for your business to function.

If your business were a cupcake, then discretionary expenses are like the extra sprinkles that go on top– they make things sweeter, but aren’t essential. 

Let’s take a look at some examples: 

Marketing and advertising

Think of this as the cupcake’s frosting. It’s how you get people to notice and want to buy your products or services. This could include things like social media ads, TV commercials, or sponsoring events. 

Employee perks

These are like the sprinkles on the frosting. They make work-life more enjoyable for your employees and can help attract and retain top talent. Examples include company outings, gym memberships, or offering flexible working. 

Travel

This is like the cupcake’s base and it’s important for business growth. It could involve attending conferences, visiting clients, or expanding into new markets. 

Employee training and development

Think of this as the cupcake’s filling, it makes the business stronger and more efficient. It could include sending your employees on courses, workshops, or webinars.

Office improvements

These are like upgrading the cupcake’s stand, they make your business look better and feel more professional. It could involve renovating the office, buying new furniture, or upgrading technology. 

How to manage your discretionary expenditure

When you first start a business, every payment, every extra pound runs through the founder or the CEO, and they more or less know where the money is going. But as you take on more employees and grow, this is no longer possible. 

As discretionary costs will always be different from one quarter to the next, it’s vital to have a clear system in place to keep track and manage them, the best you can.  

Here are some of our top recommendations for managing discretionary expenses:

Outline a clear budget

Just like planning a vacation, having a budget for discretionary spending helps you stay on track. Decide how much you can afford to spend each month and stick to it.

Negotiate with your suppliers

Don’t be afraid to haggle! You might be able to get a better deal on things like subscriptions, gym memberships, tickets, insurance plans, utilities, or even phone and internet contracts. 

Regularly review your spending

Take a look at your spending habits every month and ask yourself: are there areas where you can cut back? Maybe you’re spending too much on corporate lunches or office parties.

Prioritise your discretionary expenses

To use a non-cupcake analogy, think of your discretionary expenses as toppings on a pizza. You want to pick the ones you love most, right? So, when it comes to spending your extra money, make sure you’re getting the most out of it.

Get a petty cash box

Starting a petty cash box can be a great way to manage smaller discretionary expenses. It’s like having a little stash of cash on hand for those unexpected costs that pop up.

Encourage cost-saving measures

Look for ways to save money on your discretionary expenses. This could mean finding cheaper alternatives, buying in bulk, or using coupons.

Track all your expenditure in granular detail

Stay on top of your spend and keep all your discretionary and non-discretionary expenses in one place with our sophisticated expense management platform Capture Expense.

Book a demo today to see how we can help.   

The UK’s 2025 Carbon Reporting Requirements

uk carbon reporting 2025

If you haven’t heard, the UK government has confirmed their intention to establish new sustainability reporting standards within the first quarter of 2025with the aim of adopting IFRS Sustainability Disclosure Standards (SDS) by July 2025 

Their goal is to improve transparency and accountability for environmental, social, and governance (ESG) issues, and align the requirements with international standards. This means you’ll likely be required to provide more detailed information about your sustainability practices and climate related risks—a huge step in the right direction for climate change! 

So, with that in mind, we’ll explain what we know about the new regulations so far, and how you can get ready to comply. 

First of all, why a change in sustainability reporting? 

Investors, consumers, and governments are increasingly demanding that companies be open about their efforts to tackle climate change, manage resources, and act responsibly when it comes to ESG. 

That’s why, estimated to start in 2025, businesses will be required to align their reporting with the Task Force on Climate-related Financial Disclosures (TCFD) and International Sustainability Standards Board (ISSB) frameworks as the UK government’s Sustainability Disclosure Requirements (SDR) are set to include these standards. 

What’s the Task Force on Climate-Related Financial Disclosures (TCFD)? 

The TCFD was set up in 2015 to help businesses understand and share information about their climate-related financial risks. The framework encourages companies to disclose how climate change affects their operations, strategies, and financial plans to help stakeholders see how they’re handling climate risks and moving towards a low-carbon future. 

The TCFD framework focuses on four key areas: 

  • Governance: How the board and management oversee climate-related risks and opportunities. 
  • Strategy: The actual and potential impacts of climate-related risks and opportunities on the business, strategy, and financial planning. 
  • Risk management: How the company identifies, assesses, and manages climate-related risks. 
  • Metrics and targets: The metrics and targets used to assess and manage climate-related risks and opportunities, such as greenhouse gas emissions and energy consumption. 

What’s included in the new 2025 reporting requirements? 

While we’re still waiting on the latest announcements from the government about their plans, we can expect ISSB-aligned reporting requirements to cover key areas like: 

  • Climate-related financial disclosures: You’ll be required to report on how climate change affects your business model, financial performance, and long-term viability. This includes risks from climate-related regulations, physical impacts of climate change, and market shifts towards greener technologies. 
  • Carbon and emissions data: Up next is detailed information about carbon emissions, resource use, and environmental impact that must be disclosed. This includes your direct emissions and those from supply chains (Scope 3 emissions). 
  • Sustainability strategy and governance: You’ll also have to show how you integrate sustainability into your corporate strategy and governance, including how boards and management oversee sustainability initiatives. 

Who will be affected by new regulations? 

Businesses must report carbon emissions if they meet one or more of these criteria: 

  • Publicly listed 
  • Issued listed debt instruments 
  • Private company with a turnover exceeding £500 million and with more than 500 employees 
  • Insurance company or bank 

Similarly, LLPs that trade or have a turnover over £500 million and more than 500 employees also have to comply. Listed companies are subject to FCA Listing Rules on a ‘comply or explain’ basis, regardless of size. 

Why are these changes important? 

Mandatory sustainability reporting is a crucial step towards the UK’s climate goals. Businesses are under pressure to show they’re contributing to solving climate change—and the new requirements aim to provide greater transparency, making sure companies can’t overlook or downplay their environmental impact. 

Plus, for investors, the new standards make it easier to compare businesses’ sustainability performance across industries, helping drive greener investment decisions. Companies that fail to comply could face reputational risks and miss out on investment opportunities as stakeholders, these days, tend to prefer ESG-friendly businesses. 

Even if your business isn’t required to report, many companies track their carbon emissions voluntarily. Sustainability initiatives boost your brand reputation and attract investors; and companies that lead in sustainability are increasingly favoured by consumers, partners, and investors. 

Automate your carbon reporting in Capture Expense 

Capture Expense supports reporting of Scope 1, 2, and 3 carbon emissions, helping you achieve your sustainability goals and showcase your commitment to environmental responsibility.  

By tracking your carbon emissions in Capture Expense, you’ll be ready to comply with upcoming regulations and access valuable insights for improving sustainability. Find out more about how it works. 

Capture Expense Brochure

Unlock the power of real-time spending insights across your entire organisation. Dive into our brochure to discover how you can stay on top of reimbursements, bills, and credit card transactions as they happen, ensuring smarter financial decisions.

How to Do a Credit Card Reconciliation

Regardless of the size of your business, you need to keep on top of your corporate card spend. 
If you’re interested in learning how to do a credit card reconciliation, you’ve come to the right place.

What is credit card reconciliation? 

Credit card reconciliation is the process of comparing your credit card statements to your internal records to make sure that all transactions are accurate and accounted for. It’s a crucial step in maintaining financial control and preventing expense fraud. 

What are the two types of credit card reconciliation?

Credit card statement reconciliation for company expenses

This type deals with expenses incurred by your company using its credit cards. The aim is to make sure that all recorded expenses in your financial books match the charges on the credit card statements.

The benefits

  • Makes sure your financial statements reflect true business activity. 
  • Helps in budgeting and planning financial activities. 
  • Detects unusual or fraudulent transactions. 

For example

Imagine you run a mid-sized tech company. At the end of every month, your finance team receives credit card statements from your bank. They compare these statements with your internal expense records to make sure everything matches up. One month, they notice a charge for a luxury hotel stay in London that wasn’t logged in your records. Upon investigation, they find it was a fraudulent charge and promptly report it to the credit card issuer for resolution. This proactive reconciliation saved your company from an unauthorised expense. 

Credit card merchant service reconciliation for customer payments

Credit card merchant service reconciliation involves managing the income side of a business’s financial activities. This process makes sure that all customer payments made via credit cards are accurately reflected in the company’s financial system.

The benefits

  • Makes sure all sales and income are correctly recorded in financial statements. 
  • Provides accurate information on the company’s financial performance to stakeholders. 
  • Helps manage cash positions effectively and plan for future expenditures.

For example

Suppose you own an online retail store that accepts credit card payments. Throughout the month, customers purchase products using their credit cards. At the end of the month, you receive a report from your payment processor showing all the transactions.

You reconcile this report with your sales records to make sure every payment received matches a sale recorded in your system. You notice that a large payment from a customer doesn’t appear in your sales records. After investigating, you discover a technical glitch in your sales software that failed to record the transaction. By identifying this issue during reconciliation, you can correct your records and make sure your financial statements are accurate. 

How to do a credit card reconciliation

Here’s an easy to follow 8-step guide on how to do a credit card reconciliation:

1. Gather all your credit card statements and receipts

  • Credit card statements: collect the latest credit card statements from the issuer. 
  • Internal records: prepare your receipts, invoices, expense reports, and internal ledger (if available). 
  • Bank account statements: for payments made, have the corresponding bank statements on hand.

2. Check the opening balance

Compare the opening balance on the credit card statement with your internal records. Make sure that the previous balance matches your records and any payments made.

3. Compare the transactions

  • Match transactions: go through each transaction on your credit card statement and match it with receipts, invoices, or any internal records. 
  • Identify missing transactions: make sure every transaction on your internal records is reflected on the statement and vice versa.

You should watch out for:

  • Discrepancies in amounts: for example, a receipt shows £50, but the statement says £55. 
  • Duplicate charges: the same transaction appearing multiple times. 
  • Unauthorised or fraudulent charges: transactions you don’t recognise

4. Record the adjustments

  • Make adjustments in your internal records for any legitimate but unrecorded transactions or differences in the amounts (e.g., currency conversion fees). 
  • If there are refunds, credits, or chargebacks, make sure these are reflected in both the statement and internal records.

5. Verify the payments

  • Make sure that payments made towards the credit card (e.g., direct debit payments) are accurately recorded in both the credit card statement and your bank account statement. 
  • Check that the payment dates and amounts match.

6. Investigate any discrepancies

If you find any discrepancies, investigate:

  • Receipts/invoices: cross-check receipts or invoices with the amounts on the statement. 
  • Vendor contact: contact the vendor if there’s a charge that you don’t recognise or believe to be incorrect. 
  • Bank/issuer contact: if necessary, contact your credit card issuer or bank for assistance with unauthorised or fraudulent charges.

7. Finalise the reconciliation

  • Once you’ve confirmed all transactions, update your internal accounting records to reflect any corrections. 
  • Calculate the ending balance from your internal records and match it with the closing balance on the credit card statement.

8. Document the process

Document the reconciliation process for your records, making a note of any discrepancies and how they were resolved. This helps with future audits and keeps a clear financial trail. 

And that’s how to do a credit card reconciliation in 8 simple steps.

Automate you credit card reconciliation with Capture Expense

If you have any questions about how to do a credit card reconciliation or you just want Capture Expense to handle the entire process for you, we’ve got you covered! Book a personalised demo today.

A Guide to Enhanced Reporting Requirements (ERR) in Ireland

enhanced reporting requirements err

Since the Enhanced Reporting Requirements (ERR) kicked in from January 2024, businesses in Ireland had to make some key changes to how they manage and report on expenses.  

The new rules are all about improving transparency and making sure the right information is reported to Revenue, and they impact three key things; remote working allowances, small benefits, and travel expenses. 

So, what does this mean for your business, and how can you stay fully compliant? Let’s break it down. 

What are the Enhanced Reporting Requirements (ERR)?

ERR is a new way of making sure businesses in Ireland report specific employee expenses more accurately. If your company provides allowances for remote working, offers small benefits like gift cards, or reimburses employees for travel and subsistence, you need to report these more precisely to Revenue. 

Here’s a closer look at what needs to be reported under Enhanced Reporting Requirements: 

  1. Remote working allowances: If your team is working from home—whether it’s full-time or hybrid—you might be covering some of their home office costs like electricity, heating, or broadband. ERR means you’ll need to keep track of:  
      • How much you’re paying employees to cover these costs. 
      • Whether the payments stay within Revenue’s tax-free limit (currently €3.20 per day). 
      • Reporting any amounts over that limit, as they’ll need to be taxed

     

  2. Small benefits exemption: Many businesses like to offer non-cash benefits—things like gift vouchers or rewards—as part of their employee perks. Under ERR, you’ll now need to: 
    • Report the value of any small benefits provided to your staff. 
    • Ensure the total value stays under the current exemption limit (which is €1,000 per year). 
    • If any employee’s benefit goes over the limit, the excess will need to be included in their taxable income.
       
  3. Travel and subsistence: If your employees are on the road for work—whether it’s for meetings, conferences, or client visits—ERR changes how you report travel allowances. You’ll need to: 
    • Track and report the amounts paid for travel and subsistence, such as meals, mileage, and accommodation. 
    • Ensure the payments align with Revenue’s daily subsistence rates. 
    • Report any amounts above those approved limits, as they’ll be taxable. 

 Managing employee expenses has always been important, but now, with ERR, the stakes are higher. The key here is accuracy. If you’re offering remote working allowances or covering travel costs, you’ll need to get those details right and report them promptly. Not doing so can lead to compliance issues, tax liabilities, and even penalties from Revenue. 

How to submit your ERR

All ERR reports need to be submitted through Revenue’s Online Service (ROS); the platform that allows you to upload your data and make sure it’s filed correctly. If you’re already familiar with ROS for other tax reporting, it’ll be a smooth transition to include ERR data here as well. 

It’s worth noting that one of the key changes is the need for real-time reporting. This means you’ll need to submit the relevant data to Revenue every time you process remote working allowances, small benefits, or travel reimbursements. 

How does ERR impact your business?

The biggest change is how closely you monitor and report these expenses. You’ll need to keep a detailed record of all qualifying payments and make sure they’re reported accurately each time. Whether your expenses are managed in-house or through an external provider, you’ll need to make sure your systems are up to the task of meeting these new reporting obligations. 

Here’s three areas you can focus on to keep on track: 

  • Tracking allowances and benefits: Every remote working allowance, travel reimbursement, or small benefit needs to be tracked. Make sure these payments fit within the limits set by Revenue, and any over-the-limit amounts are flagged as taxable. 
  • Reporting in real-time: It’s no longer just about logging expenses for internal records; ERR means you need to report this information in real-time to Revenue. This helps makes sure all your spend is up-to-date and compliant. 
  • Being prepared for audits: With the new focus on transparency, Revenue will have a clearer picture of how businesses handle employee expenses. This means audits could become more frequent, so having clean, accurate records will be key. 

How to easily manage your Enhanced Reporting Requirements

To stay ahead of ERR, here’s what your business can do: 

  1. Review your current expense policies: Take a look at how you’re currently managing remote working allowances, small benefits, and travel expenses. Are they properly documented and within the allowable limits? 
  2. Upgrade your software: If you’re not already using digital tools for tracking employee expenses, now’s the time to invest. Automated systems can help you capture and report the required details accurately and efficiently, and automatically generate the reports for you. 
  3. Stay informed on Revenue guidelines: Revenue’s guidelines on tax-free limits and approved daily rates change from time to time. Make sure your team is up-to-date on the latest rules, so you can stay compliant without any surprises. 
  4. Educate your teams: Whether it’s HR, finance, or your employees themselves, everyone needs to understand the changes ERR brings. Ensure teams are trained on how to handle, track, and report expenses under the new rules. 

Expense Management in Ireland

How to generate accurate ERR reports and comply with Revenue

30 minutes

With Jonny Dowell

Business Development Manager

Struggling with ERR?

Capture Expense is built to manage your Enhanced Reporting Requirements, along with other features designed to keep you Revenue compliant across all areas like mileage and subsistence. 

Automatically generate reports tailored specifically for Irish Revenue reporting, including all the necessary data across remote working allowances, small benefits, and travel expenses – so you have everything you need to stay compliant, without the manual work. 

Capture Expense Ireland Brochure

Unlock the power of real-time spending insights across your entire organisation. Dive into our brochure to discover how you can stay on top of reimbursements, bills, and credit card transactions as they happen, ensuring smarter financial decisions.

How to Confront an Employee About Expense Fraud

Confronting an employee about expense fraud is never easy, but it’s a serious issue that needs addressing. It can be awkward and uncomfortable, leaving you wondering how to handle the situation effectively.  

Do you know what to do when you catch an employee with their hand in the cookie jar? Are you ready to learn how to confront an employee about expense fraud?

Here we go. 

Why would your employee want to commit expense fraud?

Before we get into the how to confront an employee about expense fraud, let’s have a think about the why.  

There are many examples of business expense fraud. Here are some of the main reasons your employee might decide to commit it:

Financial gain

Your employee may want to increase their income by claiming false expenses. This can include submitting receipts for personal purchases or inflating costs on legitimate business expenses. 

Appear productive

Some employees might fabricate expenses to make it seem like they’re busier or more productive than they actually are. This can be a way to justify their position or performance in the company.  
 
For example, your employee might submit false travel expenses for meetings that never took place to give the impression of being heavily involved in projects.

Lack of respect for the company

When your employees feel undervalued or have grievances against the company, they might commit fraud as a form of retaliation or out of a sense of entitlement. 

Accidental misunderstanding

In some cases, your employees might not fully understand the company’s expense policies. This can lead to unintentional fraud, where they claim expenses that they mistakenly believe are legitimate. 

Before you confront your employee of expense fraud 

Gather evidence

  • Questionable receipts: collect all receipts that appear suspicious or inconsistent. 
  • Inflated receipts: identify receipts that seem excessively high or do not match typical expenses for similar items or services. 
  • Company handbook: have a copy of the company handbook that clearly outlines what constitutes legitimate business expenses and what doesn’t. 

Verify the evidence 

  • Cross-check receipts: compare the questionable receipts with similar past expenses to identify any anomalies. 
  • Consult relevant policies: ensure the suspected fraudulent expenses clearly violate the company’s expense policies as stated in the handbook or the expense policy template. 
  • Seek expert opinion if needed: if unclear, consult with a finance or HR expert to verify the legitimacy of the receipts. 

How to confront an employee about expense fraud 

Expense fraud is a serious issue that can have a significant impact on your business. If you suspect that an employee has committed expense fraud, it’s crucial to address the situation promptly and professionally.  

Here’s a step-by-step guide on how to confront an employee about expense fraud:

Step 1: Set up a meeting with your employee

Start by arranging a private meeting with the employee in question. Ensure that the setting is confidential and free from distractions. This creates a safe environment where the employee can speak openly.

Step 2: Explain the issue

Clearly explain the nature of the issue. Detail how the suspected fraud impacts the business financially and operationally. Make sure to outline how your employee’s actions are involved. Being transparent about the situation sets the stage for an honest conversation.

Step 3: Review the documentation

Present the receipts or other documentation that you consider fraudulent. Ask your employee to explain these records. Give them the opportunity to provide their side of the story and any context that might be relevant.

Step 4: Encourage justification

Encourage your employee to justify the situation. Listen attentively to their explanation. It’s important to remain open-minded and consider all information before making any judgments.

Step 5: Take appropriate action

Based on your employee’s response, decide on the next steps. If your employee is found guilty of committing fraud, consider the financial amount involved and the severity of the offence. Actions could range from a warning to termination, depending on the gravity of the situation. 

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Take control of your company’s expenses and prevent business expense fraud. Book a demo with Capture Expense today to ensure no fraudulent claims slip through and keep your spend aligned with your policies.