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(Cinders McLeod/The Globe and Mail)
(Cinders McLeod/The Globe and Mail)

Nine to Five

How do I handle costs without cash advances? Add to ...

THE QUESTION

My employer is a large Norwegian company that covers the globe with its services. In the past, I was provided with a cash advance to cover business travel and expenses, which at times could be several thousands of dollars.

Recently, they advised me that they would no longer provide that cash and that I am now to cover business expenses on my personal credit card and then claim them weekly. I also have to use my car for business and local travel. With my children at university, I do not have this extra personal credit room.

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The company has advised me if I cannot carry these costs, then I may no longer suit its requirements and needs.

This comes after being with the company for 20 years and never having had any issues about my performance.

I find this approach unfair and requested either a company credit card or a loan to get me through the next few years of high personal expenditures. Both were denied. Is this fair? What can I do?

THE FIRST ANSWER

Zuleika Sgro

Human resources partner, talent manager, Questrade.com, Toronto

This is an interesting question on a topic that is becoming more complex for employers and staff – employee expenses and the expense claims process.

We need to step back on both sides and determine what is reasonable to be fair on both ends. You mention past cash advances from your company totalling thousands of dollars. I am sure this turned into a cash flow problem on their end (as they must have been doing this for a number of employees), which is why they have created a new procedure for expense claims.

This doesn’t mean that the cash-flow burden should fall solely on you, however. I would question how much in expense claims you are submitting per week and the turnaround from the company. If you use your personal credit card, are you being reimbursed in time to avoid interest charges or late-payment fees? Confirm that your employer will cover such expenses so you are not liable for those costs since they are out of your control and above your personal budget.

You also need to consider your job description, employment agreement, and the company’s policy about expense claims and reimbursements. Revisit what was originally included in writing as to your responsibilities and those of your employer. If you work from home or are in sales, for example, you may be required to have a vehicle for business use for local travel. If so, it is up to you to ensure you have a working vehicle to do your job; mileage expenses would be set by company policy.

Consult your human resources department about this issue and get clarification about any options. Perhaps, for example, there is a way to provide you with pre-approved expense advances for amounts above $1,000.

It will take some diligence to ensure your work expenses are organized. But absorbing costs up-front could offer you some benefits, such as building a good credit score, or racking up loyalty points or air miles for business-related purchases that would be your name.

THE SECOND ANSWER

Colleen Clarke

Corporate trainer and career specialist, Toronto

Chances are your company has made this policy change so it can better balance its cash flow. With expenses coming in weekly, they can pay out exactly what is required rather than what is estimated by each employee. Paying out of pocket and being reimbursed is the most common form of expense repayment; you would be hard-pressed to find many companies that pay expenses up front. It is not an easy change, but it is doable.

The threat to let you go if you can’t manage a hefty expense load might be a red flag, however, and one you shouldn’t ignore.

You need to get a commitment from your employer that they will reimburse you within a week or two of the expense submission. Tell them the due date of your credit card. Any late charges incurred because of late payment is the company’s responsibility. This new arrangement should not put you out of pocket personally.

Submit your weekly expenses on time. Get a business-only credit card, separate from your personal card. Choose the one with the best points program so you benefit from the points accumulation.

Change is always a transition, so ask your accountant to help set up a workable plan if you are still stumped.

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