Petrol Allowance Policy Issue
I would like to discuss a problem by sharing a real-life example that occurred today. The issue concerns our sales personnel. While most companies provide petrol allowances to their employees, we do not offer personal transportation facilities or allowances. We only provide allowances to sales personnel for marketing or sales purposes. The process is as follows: At the end of the month, they submit all bills to the accountant and receive reimbursement. The company sets a limit, for example, 1500. Beyond that, no one can receive extra money, depending on their category.
A few days ago, a sales employee (A) approached me, stating that his monthly petrol usage is 1700. He acknowledged that the company only provides 1500 and accepted that 200 is for his personal transportation, so he wasn't concerned about it. However, today, another salesperson (B) was preparing a voucher for his bills, totaling 1160, which included his personal transportation from home to the company. A observed B's process and thought that if B could cover all personal expenses through the company, then he should be able to do the same. Consequently, A approached the owner, requesting an increase in the allowance limit, asking for an additional 300-400 so he could also cover all his expenses through the company.
The question is not whether to grant him extra; rather, it's about the precedent this sets. In the future, others might follow suit, creating a management issue. The problem is straightforward, but I seek sound suggestions for changing the policy. How can we provide petrol allowances that cover only company-related expenses, not personal ones?
Please suggest alternative methods for tracking and reimbursing company-related expenses, as we operate on a small scale with limited profits. We are in a critical situation, with very nominal profits, and need a policy that addresses this issue without requiring constant oversight in the future.
Regards
From India, Jalalpur
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2I would like to discuss a problem by sharing a real-life example that occurred today. The issue concerns our sales personnel. While most companies provide petrol allowances to their employees, we do not offer personal transportation facilities or allowances. We only provide allowances to sales personnel for marketing or sales purposes. The process is as follows: At the end of the month, they submit all bills to the accountant and receive reimbursement. The company sets a limit, for example, 1500. Beyond that, no one can receive extra money, depending on their category.
A few days ago, a sales employee (A) approached me, stating that his monthly petrol usage is 1700. He acknowledged that the company only provides 1500 and accepted that 200 is for his personal transportation, so he wasn't concerned about it. However, today, another salesperson (B) was preparing a voucher for his bills, totaling 1160, which included his personal transportation from home to the company. A observed B's process and thought that if B could cover all personal expenses through the company, then he should be able to do the same. Consequently, A approached the owner, requesting an increase in the allowance limit, asking for an additional 300-400 so he could also cover all his expenses through the company.
The question is not whether to grant him extra; rather, it's about the precedent this sets. In the future, others might follow suit, creating a management issue. The problem is straightforward, but I seek sound suggestions for changing the policy. How can we provide petrol allowances that cover only company-related expenses, not personal ones?
Please suggest alternative methods for tracking and reimbursing company-related expenses, as we operate on a small scale with limited profits. We are in a critical situation, with very nominal profits, and need a policy that addresses this issue without requiring constant oversight in the future.
Regards
From India, Jalalpur
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Hi Kirti,
A simple method is to record the opening meter balance and closing meter balance of the vehicle used by the employee. You would have the employee's home address in your database, and based on that, deduct the distance he/she commutes between the house and office. Also, do a random check on the meter reading to avoid falsification.
From India, Bangalore
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A simple method is to record the opening meter balance and closing meter balance of the vehicle used by the employee. You would have the employee's home address in your database, and based on that, deduct the distance he/she commutes between the house and office. Also, do a random check on the meter reading to avoid falsification.
From India, Bangalore
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