Bruce Andrew has used his expense account to woo clients on the golf course. He's used it to pick up the cheque at restaurants plenty of times, not to mention pay for countless other items. Whatever he puts on the company dime, however, is always guided by one very simple principle.
“You have to use your common sense,” says Mr. Andrew, vice-president of marketing and business development at Direct Energy Canada.
As someone who now vets expense reports of salespeople, however, Mr. Andrew knows that it's often not a perfect guide.
“I have found in the past that ‘use your common sense' may not work with everybody, because what some people consider common sense you may not. Sometimes you have to be a little more explicit,” he says.
Following expense-account scandals at eHealth Ontario and, most recently, at the Ontario Lottery and Gaming Corp., the provincial government last week told Ontario's largest agencies to follow the same rules for wining and dining clients as the province's public service in an attempt to clamp down on lavish spending. Yet while spending shenanigans still clearly exist in agencies that operate at arm's length from the government, experts say most private-sector companies have strict policies governing expense accounts, adding that anyone with access to one probably treats it with caution these days.
“Most companies are putting a keener eye to expense control,” says Peter Brown, managing partner at Deloitte's private company services in Canada. “People are thinking twice about what they're putting on their expense report.”
Most companies, Mr. Brown adds, have a policy that makes clear what sort of items can be legitimately claimed as expenses.
Many such policies set price limits for how much can be spent in any particular area, whether it's breakfast while on the road, parking costs or how many alcoholic beverages may be charged with a meal.
“It just makes it easier for employees to know what's fair and appropriate,” he says.
Increased scrutiny of expense accounts is a natural consequence of more difficult economic times, with most companies looking to tighten their belts in all areas, Mr. Brown adds.
At the same time, however, expense accounts serve a valuable function.
“It's absolutely necessary. If you've got people who travel and have to entertain, they absolutely have to have it. And if you don't have it, you're unlikely to attract people to your business,” Mr. Andrew says.
Indeed, in many jobs, particularly in sales, having an expense account is vital, says Harvey Copeman, president and chief executive officer of the Canadian Professional Sales Association. But with so much attention being paid to expense accounts these days, people who are handing in claims for approval may be more anxious than ever.
“Anybody who submits an expense account today is probably on heightened alert and probably scrambling to check out what their company policies are,” he says.
This is especially true now, adds Mr. Copeman, given the furor that has erupted over revelations that employees at eHealth Ontario and Ontario Lottery and Gaming used their expense accounts to charge limousine rides, packs of gum, pen refills, grocery bags, and a $3,713 business dinner that included 15 bottles of wine.
The public outrage over such scandals quickly spreads to the corporate world, says Len Brooks, a professor of business ethics and accounting at the University of Toronto's Rotman School of Management.
“Corporations are continually scanning the culture, the news, particularly to see what's happening as a matter of risk management,” he says. “If they identify that some company or organizations have trouble and the government and the population are up in arms about what appear to be excessive charges that got reimbursed, then they know there is a chance their executives will ask about this or be asked about the same kind of thing in their organization. And also, it raises the penalty, reputationally, for being caught out.”
