Employee has lost receipts - how do we pay them back?

[movietub]

An employee of ours has lost some reciepts whilst working overseas. Just reciepts for food and travel, about £140 ish.

My business partner who looks after the accounts/admin side of the business says that without reciepts she is unable to pay the employee back. Apparently it would be ok if the employee could provide exact details of what was spent where, but as a period of time has passed this would really be just a fabrication.

I'm left feeling that the employee has paid for the businesses benefit and has not been reimbursed, however at least the books balance!

So what is the correct thing to do to ensure everything is fair all round? Clearly it is the employees fault the reciepts were lost, but is that enough to justify leaving them out of pocket? If you have no way of tracking down exactly what was spent where, then how is this sort of thing wrapped up fairly.

I should probably point out that we know he did spend the money for the business - and is not just trying to claim back for a night out!

 

[Marky65]

Hi

I guess a lot of this must still come down to trust eventhough you state that you know he did spend this on business because if you do know it why are you not paying it. Obviously I don't know the financial position of your company and £140 might be a large sum but if it isn't what is the problem as all you are doing is creating bad feelings between management and employees. Are you trying to make a point to other employees that they absolutely must keep all their receipts otherwise their expenses will not be reimbursed, what are your company rules on this and how is the reimbursement of expenses dealt with in their contracts of employment.
From an accounting point of view, if £140 is fair and reasonable for the length and type of his trip then I can't see there being a problem with it being tax dedcutable.
Regards
Mark

 

[movietub]

Hi

I guess a lot of this must still come down to trust eventhough you state that you know he did spend this on business because if you do know it why are you not paying it. Obviously I don't know the financial position of your company and £140 might be a large sum but if it isn't what is the problem as all you are doing is creating bad feelings between management and employees. Are you trying to make a point to other employees that they absolutely must keep all their receipts otherwise their expenses will not be reimbursed, what are your company rules on this and how is the reimbursement of expenses dealt with in their contracts of employment.
From an accounting point of view, if £140 is fair and reasonable for the length and type of his trip then I can't see there being a problem with it being tax dedcutable.
Regards
Mark

No not trying to punish or make an example! Business partner who does the accounts has said that without receipts the business cannot reimburse the cash. Which in a very black and white fashion I understand.

I felt it unreasonable that the employee should pay for something the business has had and not be paid back. His mistake may cause an admin nightmare but that doesnt mean he should be paying the business bills from his own back pocket.

So what is the correct procedure in this situation? Can the employee simply 'certify' the spend equal to the value of missing reciepts and wrap the note up with the accounts? Is this acceptable so long as the spend is well justified and realistic?

 

[Marky65]

Hi

I can't see how this could become an admin nightmare.

In previous firms I have worked for they have had expenses claims forms signed by employees which clearly state that the expenses claimed for are wholly and exclusively for the business and this is sufficient to cover any issues of there not being any receipts.

Do you think £140 is fair and justifiable for this trip.

 

[movietub]

Hi

I can't see how this could become an admin nightmare.

In previous firms I have worked for they have had expenses claims forms signed by employees which clearly state that the expenses claimed for are wholly and exclusively for the business and this is sufficient to cover any issues of there not being any receipts.

Do you think £140 is fair and justifiable for this trip.

Absolutely, there were two engineers working at a huge exhibition for a project in Hannover, Germany. Food, misc tools, tape, taxi's etc etc... I would say that the other reciepts probably do show an average daily spend of a similar amount.

The only concern is what would happen if there was an inspection of our accounts? Would they make an issue of the missing reciepts or is there a degree of trust, a 'these things happen' attitude so long as the sums are realistic for the type of business activity?

If the latter is the case then we can simply place a not in accounts and everyone moves on happy

 

[Marky65]

Hi

In an ideal world there would be a receipt for every single item but we do not and as you yourself stated that other receipts show spend for similar amounts which would show any inspector that it was fair and reasonable. When you do reimburse this get your employee to sign a form stating that the expenses where wholly for business use, if possible get him to list the types of things that he would have spent this money on and either you or your partner sign it off to state that you agree with it. Then file this paperwork where you do the rest of your payment paperwork, forget about it and move on.

 

[Tej]

What a big deal for £140

Just get him to sign a petty cash voucher .. "expenses.. overseas travel.. £140

end of!

Pay him if you trust him.

In 40 years of business.. have been doing this without a problem!!

Have never had a query!

 

[David Griffiths]

Marky's got it right. Ideally there would be receipts, but they aren't available and everybody is happy that the money has been spent. Work out a best estimate of what was spent and reimburse it.

It's a one-off (you hope!). It's only going to cause a problem if you have a Revenue inspection, if the inspector decides to look at that particular payment, and if the inspector is totally unreasonable about things. The odds against the first two are in your favour, and even the last one isn't as common as you think.

Storm in a teacup

 

[Tej]

LOL..

My employees travel sometime..
When they ask for reimbursement of expenses.. and they sound reasonable to me... I pay them... even if they have no receipts.

As said.. never had a query.. and have had inspections. Been accepted without a problem.

As long as the employees are not taking the pi55. The HMRC guys are not stupid.

IMO

 

[Atilla]

I often had this problem.
Yes, you ask for receipts where possible but there are times it just isn't so. Transport, light snacks, beers, sundries etc. soon mounts up.
did expense forms on return with receipts if available. then just signed.

Accounts never queried it.

 

[scothost]

Had this issue a couple of times in the past, it was actually a revenue inspector that told me what to do.

I made up a "lost receipt" form. Employee fills it out, advising what the amounts were for (in as best he/she remembers) and then re-imburse as long as it all seems reasonable.

I would not expect to see forms coming in all the time though, only on an odd occassion.