Situation: A company does not pay a lot of employees’ expenses but does pay mileage expenses for sales people and a car allowances to the sales manager. Sales people are paid 20% base and 80% commission. The CEO is interested in how other companies handle employee expenses. How do you manage employee expenses?
Advice from the CEOs:
- If you pay mileage, require that employees receiving mileage allowances to keep a log of business mileage:
- They should track where they went, with whom they met, what the mileage was, etc. To assist employee compliance while respecting employee time, make it simple using Excel spreadsheets or an online tracker.
- Don’t pay any mileage expenses without submission of proper documentation.
- Fire a thief. If you catch an employee cheating on their mileage expenses, let them go. This is an important example for others.
- For car allowances – ask CEOs of other local companies in markets similar to yours what their policy is. If it turns out that your policy is overly generous, consider cutting or reducing your allowance.