When an employee incurs expenses in a professional context, and these expenses are covered by the employer, they become expense reports. These expense reports allow the employee to be reimbursed for professional expenses.

What is an expense report?

In a professional context, an employee may be required to incur so-called professional expenses that the employer is obliged to reimburse. Of course, these refunds are regulated by the company’s internal regulations.

Thus, after filling out a document, called an expense report, the employee is reimbursed.

The expense report is a legal document that justifies the reimbursement.

This refund can be made in 3 different ways:

1. The lump sum method: the employer gives the employee a fixed recurring amount that covers, for example, the reimbursement of housing costs or travel expenses
2. The specific flat-rate method: this reimbursement applies to the gross salary and is generally used for journalists.
3. The actual expense method: the employer reimburses the employee for the actual expenses incurred that are mandatory as required by the employee’s employment. These expenses are predefined.

As a general rule, companies consider travel expenses as business expenses:

• Professional travel expenses (mileage costs, type of journeys)
• Transport costs (use of personal vehicle with specific mileage scale, public transport)
• Fuel expenses (reimbursement proportional to kilometers traveled)
• Restaurant expenses
• Accommodation costs
• Meal expenses.
• Toll Fees

Simply manage your expense reports using the eBrigade app. DISCOVER EBRIGADE

Conditions for reimbursement of professional expenses

In order to benefit from these expense reimbursements, the expense reports must meet certain conditions such as: the expenses represented in the expense reports must be in the professional context in the interest of the employer. These expenses must meet a certain predefined limit.

In these supporting documents, the employee must attach his or her expense invoices.

What should an expense report contain?

Expense reports should be as complete as possible. In general, these expense reports are in the form of a table where the name of the employee, the date of the professional expense, the amount and the nature of the expense appears.

In addition, the reimbursement of these expense reports is exempt from social security contributions. This means that at any time, an URSSAF inspector can carry out the necessary checks to avoid any abuse. These inspectors check whether the expenses remain within the framework of a professional activity and whether the amount does not exceed a predefined limit.

Depending on the expense, certain documents must be attached to the expense report:

1. In the case of meal allowances, the bill must include the amount of the meal, the names of the guests and the reason for the invitation.
2. In the case of travel expenses, the journey made, the number of kilometres travelled (if fixed mileage), the number of horses in the vehicle and the reason for the trip must be included.
3. In the case of accommodation expenses, the reason and place of travel must be included in the expense report. In addition, there must be a document proving that the employee travelled more than 50 kilometres from his home and that he was unable to return home.

Note: the employer is obliged to reimburse the expense reports to his employee. In addition, no contract clause can exempt the employer from this duty.

In reality, expense reports are reimbursed to the employee on a monthly basis.

Make it easy for yourself by using our comprehensive management software that allows you to manage your expense reports, directly online. MANAGE MY EXPENSE REPORTS

What are the rules to be respected?

To cover the costs, you will have to keep, very carefully, all the receipts of purchase:

• Detailed notes.
• Invoices.
• etc.

Concerning the invoices for business meals, the name of the invited customer, the name of his company and his position must be mentioned on the back.

Finally, it is important to know that accommodation expenses are admissible as long as the employee lives 50km or more from the workplace, or more than an hour and a half by public transport.

Actual/lump sum costs: Reimbursement terms

The employee is reimbursed, with a presentation of a note, on his expenses in the event that the employment contract provides for this. Otherwise, if the contract does not offer any reimbursement of the fixed fees, the reimbursement will be made without the presentation of a note.

To recover VAT

The vast majority of invoices that are given to an employer together with the amount of the costs, including VAT.

For the tax deduction and thus recover the VAT, the following conditions must be met.

1. Any expenditure must have been made in the interest of the company.
2. The company is in possession of an original invoice that complies with the law, making it possible to justify the reality of the expense.
3. The invoice should indicate the name of the company, not the name of the employee, the actual amount to be paid.
4. VAT must be payable to the supplier.

Some expenses do not offer a VAT deduction, such as for travel expenses (train, etc.) or mileage allowances. Tax adjustments could be avoided through consultation with accountants.

Mileage expense reports: what are they?

If an employee uses their personal vehicle as part of their employment, they will be compensated by the company. This situation is decided on the expense report as mileage expenses (or mileage allowances). The reimbursement scales are staggered according to the vehicle model. The administration relies on the power of the vehicle for the calculation. With this fee schedule, mileage allowances cover the majority of transport-related costs: fuel, insurance, vehicle maintenance, wear and tear, etc.

However, not all parking or toll expenses fall into this category. It must be the subject of a different expense report.

For a home-work journey, you cannot use the scale. Except in the case where the employee is obliged to use his personal vehicle to get to work.

Easily manage your expense reports

It is often a headache for companies to manage professional expenses, especially for SMEs / VSEs that do not have a sufficiently experienced accountant in their teams.

Fortunately, the simplified accounting management of expense reports has solutions. Imagine that each of your employees is autonomous in filling in expense reports very quickly (less than 2 minutes). Secure receipts and you will be able to get rid of the various tools where your invoices and various tickets are stored. In this dream, the manager is alerted when an employee records an expense before validating/refusing the reimbursement request! Automatic control rules will allow you to account for expenses in a reliable way, with employees quickly reimbursed. How?

You can test our application, THE online expense management solution.