A seconded employee is an accountable person. This means that after a business trip he is obliged to account for the funds spent by providing an advance report. The traveler should also receive a refund if it was necessary to spend more. Or vice versa, return the remainder, if any.
It also happens that the accountable person does not provide an advance report on time. In this article we will tell you what actions should be taken if a business traveler does not report his expenses on time.
When should the report be submitted
To receive money for a business trip, an employee writes a statement indicating the purpose, that is, why he needs the money. For the application to take effect, it must be signed by the manager.
Bank of Russia Instruction No. 5587-U dated 10/05/2020 established that from 10/31/2020 it is not necessary to indicate the amount of the advance and the period during which expenses are planned.
The requirement to submit an advance report within three days after returning from a business trip was also eliminated. This means that the business traveler must now report within the period set by the employer. This must be stated in the company’s internal regulations.
Additionally, employers can now issue one order for several cash payments to one or more employees. In this case, it is necessary to write the full name, amount and period during which the expenses are planned for each employee.
What to do if an employee does not submit an advance report on time
It happens that a business traveler does not provide an advance report within the deadline specified by the employer. How will this affect the company?
- The amount that the business traveler spent cannot be included as expenses when calculating income tax. This will happen because these expenses are not documented;
- During a tax audit, tax inspectors may add additional taxes. If the employer is not satisfied with this, he will have to deal with it in court.
- The rules for conducting cash transactions will be violated.
If an employee has not returned the balance after a business trip, the employer has the right to withhold money from the traveler’s salary within a month after the deadline for submitting the advance report. This is possible provided that the employee does not challenge the employer’s decision: the basis for the withholding and the amount.
Withholding funds from wages is also possible if the business traveler has no funds left after the business trip. The employer retains the funds and returns them after submitting the advance report.
The maximum withholding amount is 20% of each employee’s salary. If the amount that the employee has not returned is greater, then the salary will have to be withheld for several months.
Conclusions
If an employee does not submit an advance report on time, this indicates problems of discipline in the company, rather than any violations. However, it is important to understand that the lack of documents for expenses threatens proceedings with the tax office, which is unlikely to make anyone happy.
To avoid such problems, the accounting department should make sure that all employees are aware of internal regulations related to the issuance of amounts for reporting.
It would also be a good idea to remind employees of the importance of submitting expense reports on time.
