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employee expenses paid by company

Hi – Business ByDesign Experts

Trying to set something up for employee expenses paid by the employee on a company card. I was trying to use the standard expense type payment setting “Paid by company” and have come across a major issue with the standard functionality which I would like to clarify whether I have understood it correctly.

In summary whatever I set the tax scenario against a “paid by company” expense types it does not post any tax – in my defence the following options would indicate this was the case

I now suspect the “Taxation” bit is refers to payroll and you can generate a report for issue to your payroll provider – it does not seem to impact on VAT.

The issue is the “paid by company” posts the “Net” of tax amount even though the expense was entered gross with a tax code.

I therefore have concluded, BUT WOULD REALLY APPRECIATE SOMEONE CORRECTING ME IF I’M WRONG, that the “Paid by company” actually means the employee incurs the expense but gets the supplier to submit the invoice to the company for payment and the vat is accounted for from the supplier invoice received by the company which is expensed to the company paid expense contra used in the expense posting. I think it therefore is accounted for in 2 steps

1st – employee expense paid by company Dr Expense (net) Cr Company Paid Expenses (net)

2nd – Supplier invoice to company Dr Company Paid Expenses (net) Cr Supplier (Gross)

Cr Input VAT

I cannot find any documentation on this!

This means the credit card paid expenses will only be posted net of VAT in SAP ByDesign IF we use “paid by company” expense types which is the only way to stop them being reimbursed to the claimant but expensed.

At this time the only way I can think of dealing with this is to actually post the credit card expenses as employee expenses but replace the employee number with an alternative virtual employee who represents the credit card control. So an expense claim that has say;

Employee 1 (all gross of standard vat)

Claim A Exp 1 Employee Paid £12

Exp 2 Company Card £24

Exp 3 Employee Paid £36

Exp 4 Company Card £48

Would generate the following Expense reports in ByD

Claim 1 P/L Exp 1 £10+

P/L Exp 3 £30+

VAT £8+

A/P Employee £48-

Claim 2 P/L Exp 2 £20+

P/L Exp 4 £40+

VAT £12+

A/P Card Provider £72-

The card statement would then be reconciled to the Card Supplier account and paid as any other creditor

Not pretty but all I got!!

We could also look at having a separate Employee A/P control for each card provider if there are multiple card providers.

PLEASE – any alternative understanding of paid by company would be appreciated

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1 Answer

  • Nov 10, 2017 at 11:23 AM

    Dear Bilal

    unfortunately we are also struggling to find the best solution on expenses paid by Credit card in ByDesign.

    We would like to investigate on fake supplier to collect all debit of credit cards in order to facilitate also banking reconciliation but this is not solving the issue on VAT too.


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