What is reimbursible?

It is useful to have some idea of what type of expenses are reimbursible, and what are the official terms associated with each type of expense. The following four types of expense are reimbursible without prior clearance or permission:

• If you go to a client site on work, in the same city where you are posted, then the bus/train/cab fare is reimbursible. This is termed conveyance.

• If you go out on meetings and need to have food at restaurants and snack shacks, that expense is reimbursible. This is called staff welfare.

• If you use your personal cellphone for handling official phone calls, you can submit an estimated expense statement, and it will be reimbursed. This is called telecom expenses. This includes using personal phones for Internet access, if you use it for official work.

• If you need to extend hospitability to any partner, service provider, consultant, chartered accountant, etc. who provides goods and services to the company, it is highly recommended that you do so. This expense is labelled entertainment expenses.

The following expenses are often incurred, but their nature is such that prior clearance can easily be taken. Therefore, we expect you will incur these expenses only after taking clearance (even if verbally) from some senior officer:

• If you need to buy a book or subscribe to a magazine, it is possible. If you see a good book in an area where you know our technical know-how is insufficient and there are no books in our library, you must buy it. This is categorised as books and periodicals.

• If you need to entertain officers of a client organisation by taking them out to a restaurant or snack joint, this is acceptable without prior clearance for senior management, sales team members at all levels, personnel in pre-sales technical roles, and project managers. For others, some discretion and prior experience in similar situations will be needed, but it is acceptable. This is categorised as business promotion or "biz promo".

• If you need to go out of station, all expenses are reimbursed in one way or other. All expenses incurred for your personal movement, food, etc. are then labelled travel, not as staff welfare or conveyance. Only entertaining clients or prospects is still labelled business promotion.

All these expenses are reimbursible. Just remember the labels or categories when you file for returns.

One thing which is not reimbursible is your conveyance between home and office. When you are out of station, then conveyance between place of residence and workplace is reimbursible. At your base station, conveyance between home and client site, or office and client site, are reimbursible.

How to file for reimbursement

We have an online system by which you can request reimbursements, check the status of past requests, etc. This system is called CLAIMS (which is an acronym for "Claims Logging and Information Management System", or so the story goes). You must use your browser to connect to erp.merceworld.com, click on the CLAIMS menu, and select "New request" from the drop down menu. A form will show up, and you must fill in the details.

One key attribute you must select is the expense type. This can be one of "travel", "conveyance", "staff welfare", etc. The second key attribute is Project/Cost Centre. You must select the project or cost centre for which you incurred the expense. For instance, if you went to visit a client, you must know the cost centre under which you will file your claim for conveyance (typically, it will be a project-specific name, or if it is a Merce support visit, then the cost centre will be "Merce Support"). If you went to a college as part of a recruitment drive, you must know which cost centre that recruitment visit was under (typically it will be either "PD recruitment" or "SSD recruitment").

It is most important that you confirm the correct project name or cost centre from your reporting officer. Filing your claim with the wrong expense type (e.g. saying "conveyance", when it's "travel") or the wrong project/cost centre, are the commonest reasons why claims get rejected. It is the responsibility of the officer who instructed you to do a task to also tell you the project/cost centre which the task maps to. If in doubt, check with Shraddha or Shuvam.

Your claim will be approved or denied by your reporting officer. No claim is left unprocessed indefinitely -- it MUST be processed in a time bound manner. If it is not, just speak with your reporting officer and ask him to clear your claims.

Every request in the system has a unique ID called its "request ID". This is an integer. Refer to your claim by quoting its request ID when discussing it.

If your reporting officer denies your request, he will HAVE TO give a written reason, which will be visible to you when you check your CLAIMS requests next time. Most of the time, the reason is a clerical error on your part. You can then fix the error by going back to your claim and editing it, again through the browser-based interface. It is a good idea to keep checking your own requests periodically to see whether any have been denied.

You can delete a claim you've put in, as long as it hasn't been approved. (You can delete a denied claim.)

Once a claim is approved, Accounts will HAVE TO pay the amount to you. The only reason Accounts may deliberately hold back release of payment will be if you have not submitted supporting documents to them. Supporting documents are invoices, receipts, etc, which act as proof that you have spent the money you're claiming. For instance, if you've stayed at a hotel, you're supposed to carry the hotel invoices with you carefully, and submit them to Accounts. The way to do this is to staple the invoices to a piece of paper (half-page A4 is useful) and write two things on the paper very clearly: (i) your name, and (ii) the request ID in CLAIMS for which this invoice applies. Scanned softcopies of supporting documents are not acceptable, because of constraints placed by company auditors. Physical paper in the original must be submitted.

Accounts will not release payment for a request till they receive the supporting documents from you for any claim where they think supporting documents can possibly be submitted.

If Accounts feels you must submit supporting documents and you believe no such documents can be submitted, discuss with either your reporting officer or with Shraddha or Shuvam.

When Accounts pays your request, they'll mark the request as "paid". You will be able to see this status in your CLAIMS listing, and this will tell you when money has been released against a claim. Payment will be made directly to the bank account where Accounts deposits your salary; no cash will be paid to you physically.

When should you file expense claims

Ideally, you should file expense claims as soon as the expense is incurred. By "filing" here, I mean the initial email to be sent to your reporting officer.

It is not unusual to get delayed in filing expense claims. But if you incur expenses in one calendar month, and fail to file for reimbursement by the end of the next month, then you will be warned. This delay is not acceptable. And we all know you're extremely busy, but that reason is not good enough.

When are reimbursements released?

We aim to release all reimbursements twice a month. All expense claims received by Accounts by end of a month will be released within the first ten days of the next month. All claims received by 15th of a month will be cleared by the end of that month.

The Accounts Officer will always send you an email listing the expense claims which are being reimbursed, and the total amount being paid. This email should come to you each time any payment is made to your account against any claim. If you do not get this email, contact Shuvam or Shraddha.

The money will be remitted to your bank account directly.

How much can you spend and claim back?

Most companies have "norms" or "guidelines" for how much you can spend on a particular expense. For instance, these norms will specify that if you are a System Engineer, you cannot travel by cab.

We deliberately omit such norms. We want the officer to decide for himself what seems appropriate. And we believe in honouring all expenses incurred in good faith, even if we feel that the expense was inappropriate or unnecessary. So, it is extremely rare that your expense claim will be rejected. It is however quite possible that your reporting officer will ask you for clarifications, or that you will be told "how to do it differently" the next time. All this will be communicated to you on a one-to-one basis by your reporting officer. Just don't do it the next time, that's all.

We never doubt your honesty. But we do believe that meticulous record-keeping in money matters is a good thing in a company, because a company runs on "other people's money."

If we ever doubt the honesty of an officer in money matters, we dismiss him from service immediately. So if you're working in Merce, it means we trust you.

The role of Accounts in all this

The Accounts chaps come into the picture after your reporting officer approves your expense claim through CLAIMS.

The Accounts Department has absolutely no jurisdiction to comment on the appropriateness of your expense claim. No one from Admin or Accounts will ever ask you why you needed to spend so much money for XYZ item. (If they ever do, escalate to your reporting officer.) This scrutiny is the job of your reporting officer. However, Accounts will demand supporting documents from you for all expenses incurred for which a receipt or invoice can be produced. So, other than local train tickets and cab fares, practically all other expenses must be supported with appropriate supporting documents. Even passes for local trains and tickets for long-distance travel must be submitted, either in original or photocopy form. Remember to hold on to all vouchers, parking tickets, train tickets, invoices, bills, receipts, etc. And remember, the Accounts chaps don't doubt the honesty of your claim; they just want to have proof of your expense, so that our company books of accounts are always thoroughly clean and auditable. That's their deliverable.

The Accounts Officer has full authority to escalate your claim to your reporting officer or management for an expense claim even after the reporting officer had initially cleared it, if you fail to submit supporting documents. However, this delay is in your hands; no claims will be held up if you submit the "normal" supporting documents. If you face problems with Accounts regarding supporting documents, ask your reporting officer for help immediately.

On-account payment

We have done on-account payment, without any supporting document, to an officer's bank account, to help him cover his expenses when he is out of station. If you are placed in some other city, your expenses are not easy to predict, and you must never hesitate to ask your reporting officer for a transfer of funds into your bank account. We have often done this overnight, using electronic funds transfer, to ensure no officer is inconvenienced. In today's world, this technique works even if you are abroad.

When out of station

When you are posted out of station for anything more than two or three days, it is considered a "posting", and not a "business trip". In the case of a "posting", you will be entitled to expense reimbursement in a slightly different way. You will be told that your trip's expenses will be accounted by a particular structure. This structure wil be one of the following three options, depending on what your reporting officer and you (mutually) feel makes the most sense for your posting:

• All at actuals: This means that you must keep track of all expenses for stay, food, conveyance, and everything else, and they will be reimbursed at actuals. We do not like to do things this way usually. This is only useful for short trips. It requires a lot of record-keeping and tracking of supporting documents.

• Stay plus per-diem: This means that your stay will be reimbursed by the company at actuals. In addition, you will be given a per-diem payment, fixed before you leave for your posting. You will have to manage your food, local conveyance, and all incidental expenses within this per-diem amount. This is our preferred way of handling outstation postings.

• Stay, food, plus per-diem: This means that the company will reimburse food and stay at actuals, which of course means that you will have to retain all supporting documents for these items. In addition, the company will pay you a per-diem allowance, for your sundry expenses and conveyance. We take this approach in situations where we do not know how much the food expenses will be, and we cannot decide on a meaningful per-diem amount. If we could, we would have done that and taken Option 2 above.

Your per-diem is your allowance, which is your money. The allowance will paid to you as expense reimbursement, hence it will not be taxable. You get full flexibility to decide how you want to spend your per-diem, and your record-keeping and supporting documents reduces to zero. Of course, if your expenses exceed your per-diem, you have to spend from your pocket. You have the option of discussing a raise in your per-diem after returning from your trip, but that will involve you giving figures, trends, justifications, etc. It has been done, and we have raised per-diems on one or two occasions after feedback from our officers.

Note: Even when you are on a trip where your expense accounting is as per Options 2 or 3, you must file separate vouchers for any items which are not in the list of

• conveyance
• food
• telecommunication expenses
• sundry personal expenses (the morning newspaper, the toothpaste)

Anything outside this list is reimbursible at actuals, eg. business promotion expenses, entertaining clients, etc. These can be expensive sometimes, specially for BD members.

Rejection of an expense claim

The only time when an expense claim may be rejected will be:

• if you spend on a particular expense a second time, and you were told by your reporting officer not to do it after the first time
• if you spend on some item which is so extreme that there can be no way your reporting officer can believe that you considered it a "normal" business expense, e.g. you took your family members out for dinner and filed a claim for staff welfare. (Mind you, this might have been cleared if you had a few colleagues with you, plus one or two family members.)
• if you file expense claims for a few months at one shot, instead of filing expense claims every week or fortnight.

We have rejected one set of expense claims in our history. This was a case where the officer had done the following:

• filing for three months at one shot, even though the officer was working in a Bombay-based project during this entire period
• filing claims more than six months after the end of the three-month period
• filing with zero supporting documents
• figures with obvious approximations, e.g. "Rs.45 for auto fare from home to station, multiplied by 22 days in the month = Rs.990", clearly indicating that the officer had kept no records of daily expenses at actuals
• per-month conveyance figures amounting to about three times what others on the same project had filed per month on an average
• a complete absence of all explanations or supporting documents after repeated requests (the officer had resigned just after filing the claims)

The amount claimed was about Rs.27,000, almost entirely for conveyance, for a three-month period, in 1999, for a Bombay-based officer handling a software development project for a client on-site at Lower Parel. Other officers on the same project had claimed conveyance expenses between Rs.3000 and Rs.4000 per head per month during that period. We rejected this claim of Rs.27,000 completely, after getting no response to repeated requests (in writing) for supporting documents and more details.

Such cases are very rare.