Knives out for expenses

One Auckland boss has capped the cellphone use of his 15 staff to $50 each a month, and has fitted GPS locators to the company cars to ensure they are not parked outside nice restaurants for "business meetings".

These are the lengths some companies are going to, as staff expense claims face the scrutiny and cuts of a deepening economic downturn.

Accountants say most companies are dumping fixed expense allowances and per diem payments for food and entertainment, and insist on receipts for any reimbursements.

This stands in contrast to Parliament, where MPs get a fixed $14,800 top-up to cover all sorts of unspecified expenses such as entertainment, gifts and even luggage. They do not have to keep receipts.

Away from the halls of power, the private sector is far tougher.

New Zealand's biggest company, Fonterra, is exercising "prudence".

"Travel budgets have been tightened and we've had a good look at things like the number of staff attending conferences and examining if they're really necessary," said Kira Schaffler, strategy and performance general manager.

"We have been increasing the use of video and phone conferencing where possible."

A Vodafone spokesman said all its staff expenses were receipted. The phone company uses a software firm Spendvision to monitor everything from takeaway coffees to cellphone towers, he said.

And TVNZ has reduced staff expenses through cuts to Koru Club memberships - only camera operators and current affairs producers and reporters are entitled to them now.

Spokeswoman Andi Brotherston said the company had taken "a very hard look" at expenses, and had clamped down on the use of taxis and capped mobile phone usage.

The broadcaster still paid $69 per diems for out of town travel, but the daily rate had not been raised in years.

John Shewan, chairman of PricewaterhouseCoopers, said the private sector had been phasing out per diems and general allowances over several years.

Per diems are fixed daily payments, usually for working away from the office, to cover meals and sometimes accommodation.

"There's been a gradual improvement of controls around employee expenses," he said.

"Technology has helped in things as fundamental as scanning invoices, making computer-based expense approval systems more effective."

The private sector now focused on direct reimbursement of actual expenses incurred, so per diems were much less common.

"In some circumstances they'll be still appropriate, where you've got a situation like overseas travel. It may be very difficult to get receipts for things like taxis in some countries. Where the compliance costs exceed the benefit, per diems may still be paid - but kept under close review to make sure they're reasonable for the employee."

Charging the company for a boozy business lunch was a thing of the past.

"Bottles of wine in excess of $80 tend to get clobbered these days.

"It's reasonably unusual these days to see some of the more blatant abuses of expense systems that were more common in the 80s and early 90s.

"Business lunches are more modest than they used to be, and there seems to be a lot less alcohol. They are very much more focused on business. In contrast, I think there's been a significant explosion in the use of coffee bars for business-related discussions," he said.

Companies are also hardening up rules for taxi and cellphone use.

"It's quite common these days for employees to either be asked to pay all their private calls, or to pay 50 per cent of their overall cellphone bill," Shewan said.

"And I think we see far fewer taxi vouchers and allowances. Instead, companies demand specific reimbursement of taxi fares."