Do we need an expense account policy?

If a company provides a credit card for the convenience of reimbursable expenses, should there be a policy that details allowable and unallowable expenditures?

Posted  06-20-2012

Ann Kiernan replies:

Absolutely! All employers should have a uniform system for reporting and reimbursement of ordinary and necessary business expenses incurred by employees. Workers need to know the rules, and also that deviating from the policy may result in the loss of the tax deduction to the company or additional taxable income to the employee. Items commonly covered in expense account policies are: business travel, meals and lodging, professional dues, gifts and entertainment, seminar registration fees, and the like.

Information here is correct at the time it is posted. Case decisions cited here may be reversed. Please do not rely on this information without consulting an attorney first.


About the Author:

Ann Kiernan has litigated claims of wrongful discharge and discrimination before state and federal courts and administrative matters before the New Jersey Division on Civil Rights, the National Labor Relations Board and the Equal Opportunity Employment Commission, representing both employers and employees. Ms. Kiernan co-hosted The Employee Rights Forum, a weekly radio call-in show reaching up to a half-million listeners in the New York metropolitan area, and her articles on employment law have been published in many books and magazines. Both as a firm partner and as a director, Ms. Kiernan gained solid experience in management and human resources compliance. She has worked with Fair Measures since 1997.