Lost receipts: Overview, definition, and example
What are lost receipts?
Lost receipts refer to situations where an employee or contractor can’t provide the original proof of purchase—usually a receipt—for a business expense they want to be reimbursed for. This often happens during travel, meals, or small cash transactions where receipts go missing or are never issued.
Why are lost receipts important?
Companies need receipts to properly document expenses for accounting, budgeting, and tax reporting. But when receipts are lost, businesses must decide whether to still reimburse the expense and how to document it. Having a clear policy or clause about lost receipts helps prevent fraud, supports audit readiness, and keeps expense processes consistent and fair.
Understanding lost receipts through an example
An employee buys a $25 taxi ride during a work trip but loses the paper receipt. If the company has a lost receipt policy, the employee might still be reimbursed by filling out a form or providing a written explanation. Without any policy, the reimbursement could be denied—or worse, inconsistently approved—leading to confusion or favoritism.
Example of a lost receipts clause
Here’s how a lost receipts clause may appear in a contract or expense policy:
"In the event a receipt is lost or not available, the employee must submit a written explanation detailing the nature, date, amount, and business purpose of the expense. The Company reserves the right to deny reimbursement for undocumented expenses at its discretion."
Conclusion
Lost receipts are a common part of business spending, but they can cause accounting headaches if not handled properly. A clear clause or policy helps maintain financial control while allowing flexibility for honest mistakes. Businesses should document lost receipt procedures and apply them consistently to avoid issues down the line.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.