Depending on who you ask—or how closely your manager is keeping an eye on you—the answer could be as straightforward as an ergonomic desk chair or as outlandish as Taylor Swift tickets.
Last month, Brex, the spending platform whose flagship product is business credit cards, analyzed the past year of expenses made by 20,000 companies—mostly in tech—that use its platform. Turns out well-compensated workers have an extra-loose definition of “business expense.”
But it’s not a big deal, Michael Tannenbaum, CFO-COO of the company, tells Fortune. And even the more outlandish and flashy purchases might actually be reasonable, he says.
Some of the most shocking charges Brex users made this year include:
- A membership fee to a private network for digital nomads ($1,300)
- A $350 haircut
- A 35% uptick in receipts mentioning “pickleball”
- The cost of full apartment soundproofing
- Taylor Swift tickets (bought 47 times)
- Beyoncé tickets (bought 19 times)
- Formula 1 race tickets ($2,500)
- Fifa Women’s World Cup tickets ($2,800)
- Food (Smallest reimbursed expense was $.19 for gum, the largest was $21,000 for a New York “VIP dinner”)
Tannenbaum characterizes Brex’s user base as forward-thinking. The fact that each of the expenses on this list was approved is also a sign of our current work climate—a remote world in which the power remains in the employee’s hands, Tannenbaum says.
Expensing $350 haircuts is the result of today’s work environment
Each of these expenses were made, presumably, by a worker who believed it aligned with their company’s general ethos. “That dictates a lot of these things,” Tannenbaum says. Still, each company has different expectations, and they give their workers a different level of freedom to cash out on the company’s dime.
The tightest-leash scenario is “where a few employees have a [company] card, and everything’s done by reimbursement, and you can’t get reimbursed if it’s not approved,” Tannenbaum says.
On the opposite end are more laissez-faire leaders who believe “policing expenses is not a good use of my time, and employees shouldn’t have to worry about being out-of-pocket for work expenses.”
The latter approach seems more reasonable to Tannenbaum, who says it’s worth it to have a strong culture—even if that means the occasional employee is spending too much money on coffee.
He’s been in the room long enough to be able to provide a scenario in which every expense on the list could be justified—yes, even the Beyoncé tickets, which could be feasibly used to lure a client.
Additionally, the dominance of remote work—which Brex, a remote-first company, dines out on—has led to an avalanche of new expenses that would otherwise be absorbed by the office, he says.
That can run the gamut from purchasing technology for work to running up mailing or document-processing costs. The latter is something Tannenbaum has experienced thanks to his role as a named officer on Brex’s money transmission licenses.
“I’m on many licenses, and I have to get notaries and send stuff through mail and FedEx for state licenses, which I would’ve done in the office,” Tannenbaum says. “Or there would’ve been someone doing it for me. Now I’m paying for it myself.”
Ultimately, the Great Resignation (which became the Big Stay) has planted us in a veritable employee market right now, Tannenbaum says, adding that giving workers leeway to expense perhaps not-quite-business-related perks is a recruiting and retention tactic. “We’re trying to do things that are more employee-friendly. We’re going to give people the benefit of the doubt—that’s the prevailing ethos,” he says.
That’s especially true with tech companies, which Tannenaum says tend to be transparency-focused and employee-friendly. “You’re less likely to find finance leaders who are stringent on rules; why spend time quibbling on $5 at Starbucks? Generally, it’s about culture and whether you want your employees to feel like they’re empowered or being watched.”
“There are big benefits for white-collar CFOs to ignore small details,” he adds.
But a slightly-too-loose employee could risk losing their job or being put on notice for running up a tab—especially if a company is operating on thin margins. Expensing even a few dollars can seem small, but it can also be very emotional, and the transaction can become nasty between workers and leaders very quickly, Tannenbaum adds.
“Gen Zers, young workers, maybe don’t understand. When in doubt, or if they haven’t developed a sense of right or wrong, they should ask their manager,” he says. “It’s just not a place I’d take a risk.”
Credit: Source link
