Reclaiming Personal and Staff Expenses

For a true picture of the expenses required to run your business, all money spent on items and services for the business needs to be recorded, whether it was directly from a business bank account, from a member of staff’s personal cash or your cash/personal bank account/personal credit card.

The easiest way to account for all money spent on the business is to use a bank card for the business bank account. This avoids working out who paid for what and where money is owed but there will always be a few expenses paid from personal money.

The following applies to both you and your staff:

Receipts should always be kept. Make it company policy that expenses will not be paid if there are no receipts to validate a claim.

At the end of each month a document (a spreadsheet, for example) should be created, listing all the receipts stating the date, the supplier name, what was purchased and the amount with a total to be reclaimed at the bottom.

Any business miles travelled in a personal car should also be recorded here, stating the date of the journey, where from and where to, the reason for the journey and how many miles. At the time of writing, up to 45p per mile for the first 10,000 miles per year per person (25p over 10,000) can be reclaimed against your business tax, it is your decision on how much to pay yourself and your employees.

The receipts should be attached to this document and processed in your bookkeeping system. The amounts are then transferred from the business bank account to the personal accounts.

Some computerised accounting systems have the facility for staff to be able to log in and process their expenses in a very similar way to using spreadsheets.

If the business is not in a position to repay your personal business expenses, the receipts should still be recorded each month and remain as purchases to be paid until the business can pay you back.

Summary

  1. Set out a company policy stating all requirements and the dates required by in order for personal expenses to be paid (a policy you should also follow yourself!).
  2. Provide a spreadsheet or printed template for staff to fill in.
  3. Pay the expenses on a specified day each month to avoid wasting time having staff keep asking when they are going to be paid.

Feb 3, 2014