A pile of receipts lands on the desk: how to do a claim so you can trace it back

Hook

At month end the boss walks into the accounts department, puts a rubber-banded pile of receipts on the desk, says "These are all company, just claim them", and walks out. The accounts clerk looks at the pile — petrol station, restaurant, hardware shop, supermarket, and one handwritten slip nobody can identify. Two things are going through her mind: are all of these really company? And — may I ask? Most of the time, she will not ask. This episode is about fixing that. Not by making her a little braver, but with the right form.

The problem is not the receipts, it is who decides

Let me be clear about one thing first, because it is the root of the whole matter: why? First, she was not there. Whether that meal was with a customer or with the family, she has no way of knowing. Second, she will not contradict the boss. That is human nature. You drop a pile of receipts on her and say "these are all company", she has doubts, but she is not going to ask you to your face. Third, and most important: the guess she makes becomes the record in the books. When LHDN asks later and the books say that was entertainment — on what basis? On the guess of somebody at the time who did not dare ask. So the right way is this: hand the decision back to the person who spent the money. The claimant fills it in himself and signs it himself. That signature is him saying: this one is the company's, and I take responsibility. The accounts department's job changes from guessing to recording. The difference between those two words is the whole of this episode.

The header of the claim form: five things, and missing one causes trouble

A claim form you can actually use has five things in the header. First, the entity — which company is being claimed from. The boss has three companies, and that pile usually has receipts belonging to all three. Without this column, receipts get mixed into the wrong company's books, and then you have the problem we covered in the episode on a director's debit balance. Second, the claim period — from which date to which date. This column is what stops double claims. Write the period and you know which claim a given receipt belongs to; see the same receipt again next time and one comparison tells you it has been claimed. Without a period, the same receipt being claimed twice is a very common thing. Third, the claimant — who is asking the company for money. Not "a pile the boss gave me", but a specific person. The project manager paid for something himself, the admin staff went and bought something, the boss put it on his own card — they have to be kept apart, because in the end the money goes back to different people. Fourth, how it is settled — the column most often left out. Two choices: either the company pays him back, a transfer, money going out; or it is posted to his director's current account, the company owes it for now and nothing goes out. He must tick this himself; the accounts clerk does not decide it for him. Fifth, a number. One number per claim form. We will use it in a moment when we talk about tracing back.

The body: one receipt per row, one category per column

Now the crucial part: how the body is laid out. There is only one rule. A row looks like this. On the left is the identity of the receipt: date, receipt number, supplier, description, total. On the right is a run of category columns: travel, entertainment, office supplies, petrol and tolls, repairs, others — and then one more column: private. So how do you fill the row in? You allocate the amount on that receipt across those columns on the right. A supermarket receipt for one hundred and twenty ringgit — eighty-five of it is for the company pantry, thirty-five is for the boss's house — so eighty-five goes into office supplies and thirty-five goes into private. And then the loveliest part of this design: it is a built-in check. If it does not agree, something has not been put in its place. And at month end, the total of each column is one journal entry. The travel column total goes to travel, the entertainment column total goes to entertainment. No going through them one by one. The form has already done the bookkeeping.

Why one row per category will kill you

So how do most people do it? In Excel, one row per category. This row is travel, the next row is entertainment, the next is office supplies. It looks neat enough. But it has three faults. First, a receipt that spans two categories will not fit. That supermarket receipt has to be split across two rows — and are those two rows still the same receipt? Who can tell? Second, the row loses its link to the paper. A row is no longer one piece of paper. If you want to check which receipt a row came from, you are relying on memory or on a guess. Third, and this is the painful one: when you have to pull it apart later, you cannot. Six months on the auditor asks: over the whole year, which of these were private? With a one-row-per-category form you have to re-read every row and judge it again. With a one-receipt-per-row, one-category-per-column form, you only look at the private column. One second's work. So this is not a question of tidiness. It is a question of whether it can be pulled apart later.

The private column: not deducted, transferred

Now the private column, because a lot of people fill it in and then do not know what to do with it. The private portion is not "deduct it and ignore it". It is an entry — it goes to the director's current account. Which means: that thirty-five ringgit is not the company's expense, it is thirty-five ringgit the boss took out of the company. Why must it be done that way? Because if you treat it as a company expense, it is wrong for tax, the auditor will pick it up, and the books will never show how much the boss took. And if you simply leave it out and ignore it, that money went out of the company's account and the books will not agree. So: put it in, allocate it to the private column, transfer it to the director's current account. The books stay clean, and the boss knows how much he has taken out of the company this year. ⚠️ And one reminder — which way the director's current account runs makes a difference in law. The company owing the boss is a liability; the boss owing the company is another matter, and we have a whole episode on it. This column accumulates quickly, so look at it regularly.

Traceability: every entry finds its way back to the paper

Last, tracing it back. Three actions, all small, and they decide whether any of this is useful. First, string the numbers together. The claim form has a number and every row has a row number — write the claim number plus the row number on the physical receipt. Later, when you see an entry in the books, you can work back to which row of which claim form, and then to the piece of paper. Second, the attachments go in the same order as the rows. The receipt for row one goes first. Do not stuff a bundle into one envelope and leave the next person to pair them up. Third, scan the whole thing into one PDF — the form in front, the receipts behind, in order. One claim equals one file. This is the same reasoning as the episode on evidence packs: one entry, one complete set of evidence. Only this time the set was put together and handed in by the claimant himself.

Three rules that keep it running

Having built the system, you have to keep it running. Three rules. First, have a cut-off date. Claims are collected on a fixed day each month. After that it goes into next month — otherwise the month end never closes, a point we made in the episode on what happens after the books are closed. Second, the approver cannot be the claimant. Filling it in yourself, signing it yourself and approving it yourself is not a system. At the very least a second person has to have looked at it. The boss's own claims should be reviewed by somebody too — not out of distrust; that signature is your protection later. Third, anything with no receipt is handled separately. Parking, small change, a repair where you did not get a receipt — do not force some unrelated receipt in to cover it. Write it as it happened, note that there is no receipt, and have the approver sign. As we said in the episode on incomplete records: incomplete can be fixed, false must never be touched.

To close

Back to that pile of receipts. The problem was never the pile. It is that nobody ever gave the person spending the money the right form — so all he could do was put a rubber band round it and drop it on somebody who did not dare ask him. One form: five things in the header, one row per receipt, one column per category, plus a private column. Get it right and the accounts department does not have to guess, the boss can see how much he has taken, and when the auditor arrives you can answer in one second. We have made that form and put it on the episode page, and you can use it as it is. Want a version adjusted to your own chart of accounts? Grab a coffee first and talk about your business. For the accounting, come to LTT. I am LTT, helping SME bosses get their accounts straight. Follow us, and see you next time.