You get a plane ticket, you pay for a couple meals, and create a simple list of the expenses that need to be reimbursed with your employer. Well, how do you keep track of that list, and how do you then keep track of what was reimbursed? What do you do with mileage or other non-cash items? Here’s our six step process of what works for us.
We’ve continued to improve our process over the years as both Angela and I have expenses that get reimbursed from work, so the steps below aren’t how it has always been, but it’s what we’ve found that works for us.
Create a list of your obvious expenses while you are traveling. Items to keep track of include such expensable items like professional dues (as applicable), meals with clients, business approved supplies, hotels, WifFi as needed/required, and anything else with a receipt. Some items, like GoGo Air from American Airlines, can e-mail you the receipt, so be sure to keep those in your inbox until you’ve actually expensed them. These are usually quite easy to track since you can login to your bank/credit card site, and quickly see what expenses there are.
Add to your list the non-cash or difficult-to-get receipts like mileage, tolls, taxis/travel paid in cash, etc. This one can be a challenge to remember, so this is where a list really comes in handy. Good old pen and paper works best for this.
Figure out how to make sense of “heads” from “tails” in your regular budget. The approach that we have found that works for us is to keep a completely separate credit card (that earns us cash back by the way) for ALL business expenses. Despite our separate credit card we keep for business, the question comes up on whether we decide to exclude it entirely from Mint.com? Nope! What we actually do is I have created a category on Mint.com that is called “ReimbursABLE.” Then, I simply update the settings to have it exclude any items with this tag from our budget since our budget is for our PERSONAL expenses. Then, as an expense comes across, I simply tag it as ReimbursABLE from my phone, computer, or iPad.
Create consistency. One of the toughest parts about budgeting for business expenses is knowing when you will actually get reimbursed for the expenses. It can definitely create a cash flow issue if it takes you months to submit expenses, so what we’ve done that helps is to learn the system. It took us quite a while on this one for Angela’s work, but finally realized that ‘A-HA’ moment that all approved expense reports get paid on Thursdays. So, we now have reminders setup to get the expense report submitted in time for it to be approved and processed for the last Thursday of the month. This helps make sure we never get in a cash flow bind when we have a $1,500 business plane ticket and $1,000 in hotels to pay for, and the cash isn’t in our account yet.
Do a quick cross-check once the expenses are paid. Like I said earlier, I use the category “ReimbursABLE” in Mint.com, but once we actually get the paycheck/expense reimbursement, I move the tag over to a new category called “ReimbursED.” This helps us true-up that all expenses were paid and that nothing got kicked back unexpectedly.
Save more! This may not be intuitively obvious, but if you have business expenses and you get cash back or airline miles on a card, use it to add a little more savings to your accounts even on the 1 to 1 reimbursed expenses. For the non-cash items that don’t necessarily have an immediate expense (mileage for instance), don’t think of the mileage money as newly found budget that you can spend freely. They pay you mileage for a reason: you have to pay for gas, and you have to pay for additional wear-and-tear on your car. As in, you will have to replace your car more frequently if you have lots of business car travel, so treat it as a way of adding money to your savings for your next car downpayment (or outright cash purchase if you prepare).
- Do you have any business expenses for your job?
How do you keep track of these expenses?
Tell us about what has helped you stay on track.
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