Handling Employee Expense Accounts

An employee travels to a trade show for a few days and incurs business-related expenses for travel, food and lodging. Another employee takes a potential client he’s wooing out to lunch. An employee runs a quick errand to purchase office supplies. Another employee uses his own car for business purposes. These are all typical scenarios of reasons why employees need reimbursements.

The company sets the rules for what qualifies for a reimbursement. Keeping accurate records of these detailed reimbursements will not only be valuable for reconciling accounts but for monitoring employees as well. A well-compiled spreadsheet of employees’ individual ledgers can alert the accounting department of an employee taking advantage of the company’s policies.

How to Post Employee Expense Accounts

Often management must first approve the expense report of an individual employee before it gets sent to accounting. The entries need to be posted in the cash disbursements journal and the corresponding expense accounts. These details must also be compiled in the employee’s records. It is recommended that the expense report and copies of the submitted receipts be kept in the employee’s file. The records could be need for verification if questions arise at a later date.

Sometimes employess are required to submit their expense report immediately upon return or the accounting department may choose to schedule one day a week where the reports are reviewed and paid. This is advantageous because it allows accounting to manage their work load more predictably.