Ethical Reporting of Business-Related Expenses

Introduction

An employee that was about to leave on a business trip was approached by a colleague who mentioned that she had been able to report personal costs as business-related expenses in her report.

Main body

Ron Bush received information from a colleague before he was due to go on a business trip regarding expense reporting. The colleague reported that she had gone on a business trip with her husband recently and had decided to stay an additional weekend. She had included the costs of the weekend, which included food, beverages, and entertainment, into her expenses report, which was approved by her manager. Bush notes that this goes against the rules set in the employee handbook, and such reports must only include business-related expenses.

However, the colleague argues that the additional weekend did not change the flight cost that the company had already paid for and that she was deserving of recreation due to her long hours of work. During the business trip, Bush takes to Washington, he and his wife also spend a weekend for recreational purposes, and Bush saves all the receipts from those two days. He debates whether or not to submit the non-business-related costs with the expenses report.

It is recommended that Bush not include the weekend costs within the expenses report. It goes directly against the rules described in the employee handbook, which is something Bush is aware of. Though punishing the colleague after her incident may be unnecessary, it would be vital to discuss the situation with her manager in order to not let such oversights occur once again. Additionally, in order to not single out the colleague, it would be beneficial to collectively review the policy of expense reports either through a meeting or memo. If such incidents of inaccurate expense reports were to become widespread, they would have a number of negative consequences.

Some of these consequences include inaccurate expense tax deductions, the wrongful application of the term ‘business-related expenses,’ and misuse of company resources. Living, personal, and family expenses are not deducted from employees, and adding non-business-related costs to expenses reports can influence the taxation of employees if the sums become substantial (Internal Revenue Service, 2021). If the colleague or Bush spread the misinformation that managers can approve non-business-related expenses within reports, certain individuals may abuse this and wrongfully ascertain certain costs or goods as being business-related. This may lead to the misuse of company resources and capital, and when either may become necessary, the shortage may affect the firm’s operations or welfare. Due to these consequences, it is essential that no further incidences of false expense reporting occur.

Conclusion

In summary, Bush was given an opportunity to report personal costs as business expenses after a trip related to the company’s operations. This thought was incited by a colleague that has done similarly and met no protests from her manager.

Despite this, it is important that employees understand the ways in which false expense reporting may affect their and the company’s welfare. While punishing incidences that have already occurred, any future actions in a similar direction may have consequences, either through warnings, demotions, wage deductions, or termination of employment in severe cases. To avoid this, it is vital to inform employees on the correct procedures of expense reporting. In spite of the serious issues such misreporting may cause the company, the firm would prefer to prioritize their employee’s well-being, time, and reporting proficiency and limit adverse consequences that directly affect them.

Reference

International Revenue Service. (2021). Deducting Business Expenses. IRS. Web.