Year-end is busy enough without a pile of missing receipts, unsubmitted expense reports, and company card charges no one can quite explain.
But when expense tracking gets pushed to the back burner throughout the year, those little loose ends have a way of showing up all at once in December.
The good news? A little cleanup now can save your finance and HR teams a lot of headaches later. Here’s what employers should have on their radar before the year wraps up.
Most year-end expense headaches don’t happen overnight. They build up through late submissions, missing documentation, unclear reimbursement policies, and approvals that never quite make it across the finish line.
And while expense reporting may seem like a finance issue, payroll has a seat at this table, too.
Under IRS accountable plan rules, employee reimbursements generally aren’t taxable when they meet requirements for business purpose, proper documentation, and timely reporting. When those requirements aren’t met, reimbursements may need to be treated as taxable wages and reported on an employee’s W-2.
Discovering those discrepancies after your final payroll of the year? Not exactly the kind of year-end surprise anyone wants.
California adds another layer to the equation. Under Labor Code Section 2802, employers are required to reimburse employees for necessary expenses incurred while performing their job duties.
That can extend beyond travel and mileage. For businesses with remote or hybrid employees, expenses like personal cell phone use and home internet may also need consideration.
The takeaway? Make sure your reimbursement policies reflect how your employees actually work today, not just how they worked when the policy was written.
Before December gets away from you, here are five areas worth reviewing:
A little attention to these details now can make for a much cleaner close and fewer loose ends following your team into January.
Of course, the best way to avoid a year-end expense scramble is to make the process easier all year long.
When expense reports, approvals, and payroll live in separate systems, it’s easy for information to get lost between the handoffs. That’s where connected technology can make a difference.
With Coastal’s Expense Management, employees can capture receipts and submit expenses right from their phones, while managers can review and approve requests without the back-and-forth.
And because expense management is connected to payroll and HR technology, businesses can streamline reimbursements, improve visibility, and spend less time tracking down paperwork.
It’s one less administrative headache for your team and one more process working the way it should.
Year-end will always come with a full to-do list, but expense reporting doesn’t have to be the thing slowing you down.
Whether you’re looking to clean up your current process or explore technology that takes more of the manual work off your plate, Coastal Payroll can help you find a better way forward.
Let’s Connect and make expense management one less thing to worry about heading into 2027.
