Cost compliance doesn’t have to be a guessing game. Learn which mistakes put your EU funding at risk, how to spot them early, and why Kronis is your digital safety net for financial reporting.
Introduction: Why Cost Compliance Is a Big Deal
Securing EU funding is a huge achievement for any organisation. But did you know that most rejected claims and delayed payments in Horizon Europe projects come from simple, avoidable cost mistakes?
The rules may look intimidating, but with the right guidance—and the right tools—your project budget can work for you, not against you.
Imagine if you could avoid 90% of the common pitfalls before they ever happened.
Let’s show you how.
Real Story: How a Small Mistake Almost Cost an Organisation €80,000
In 2024, a manufacturing SME from Southern Europe was finalising a Horizon Europe project. The technical work was on track, and the consortium was preparing the final reports.
When submitting the financial statements, two issues quickly emerged. First, more than €80,000 of personnel costs were not backed by properly signed timesheets. The SME had relied on its internal ERP system to track hours, assuming this would be acceptable. Unfortunately, the system did not include the mandatory signatures and approvals required under Horizon Europe rules.
Second, one subcontracting contract had not been formalised in writing. As a result, that expense was immediately considered ineligible.
Together, these issues placed nearly 20% of the SME’s funding at risk. For a 20-person company with limited cash flow, the potential shortfall forced management to pause investment plans and delay new hires.
After months of clarifications and document reconstruction, the SME managed to recover part of the claim, but ultimately lost €18,000. It was a costly reminder that in Horizon Europe, even small compliance oversights can have very real financial consequences.
Last year, a promising biotech startup nearly lost €50,000 in grant funding. The reason? A single project manager forgot to upload several timesheets and missed the approval deadline for a subcontractor.
The EU auditor flagged the expenses as ineligible and held back payment. Only after a stressful back-and-forth (and frantic document hunting) did the startup recover part of the funds.
Their lesson: Compliance is not just about rules—it’s about protecting your project’s future. With digital tools like Kronis, mistakes like these are caught before they become costly.
The Most Common EU Project Cost Mistakes (True Stories from the Field)
Every year, thousands of organisations make the same mistakes. Here are the top culprits, based on EU Grant Agreement rules (notably Articles 6, 20, and 21):
1. Reporting Ineligible Costs
Teams often claim expenses that the EU simply does not cover—like marketing costs, entertainment, or unrelated travel. According to Article 6, only costs directly linked to your project and fully documented are eligible.
2. Missing or Incomplete Records
From invoices to timesheets, failing to keep proper supporting documents (see Article 20) is the fastest way to lose funding. If you can’t prove it, you can’t claim it.
3. Poor Change Management
Did you shift budget between categories? Forget to get approval for new subcontractors? Article 21 makes clear: unreported changes can mean rejected costs, even if the spending was valid.
4. Double Funding
It’s a classic mistake, using the same expense in more than one project. Article 6 strictly forbids this, and detection can trigger audits or even financial penalties.
5. Outdated or Incorrect Data
Legal details, bank info, VAT numbers, if your organisation’s data isn’t up to date, you risk delays and extra scrutiny during audits (see Article 24–25).
The price of a small mistake?
Rejected claims, delayed payments, or even a full project audit.
Eligible vs Ineligible Costs: What’s the Difference?
It’s easy to assume every project expense will be covered, but the EU has clear rules about what counts as an eligible cost. Knowing the difference can save your startup from last-minute surprises and keep your funding secure. Here’s a simple breakdown to help you double-check your next report.
Eligible Costs (Examples):
- Salaries for project staff (with timesheets).
- Project-related travel and accommodation.
- Subcontracted research (if approved).
- Consumables/materials used in the project.
- Equipment depreciation (for project use).
Ineligible Costs (Examples):
- Costs not linked to the action.
- Entertainment, gifts, or hospitality.
- Expenses already funded elsewhere (no double funding).
- VAT (if refundable or already deducted) .
- Costs without proper documentation.
Tip: When in doubt, check Article 6 of your Grant Agreement.
Why Do These Mistakes Keep Happening?
Let’s be honest—nobody sets out to make mistakes with their EU project costs. Yet, even organised teams find that errors slip through. If you’ve ever felt confused or overwhelmed by the process, you’re definitely not alone.
- Unclear Rules: EU guidelines can be dense and change from one call to the next.
- Staff Turnover: Knowledge is lost when people leave and handovers are missed.
- Manual Processes: Relying on spreadsheets and emails instead of automation.
- Lack of Awareness: Many organisations don’t even know the key articles in their Grant Agreement until it’s too late.
The good news is, these challenges are completely normal—and fixable. At Kronis, we’re here to help you avoid frustration, learn from every step, and turn cost compliance into a smooth part of your project journey. Mistakes might happen, but with the right support, you’ll always stay on track.
How Kronis Helps You Avoid Every Pitfall
What if your software could help you spot reporting gaps before they become a problem? With Kronis, it’s possible.
Kronis is a financial reporting tool built to support your EU funded projects compliance process, helping you reduce the risk of ineligible costs while keeping your documentation organised and audit-ready.
Kronis was designed by experts who have seen every possible cost mistake—so you don’t have to repeat them. Here’s how the platform keeps you on the safe side:
- Calculation of personnel costs — apply EU rules consistently, with built-in formulas for productive hours, hourly rates, and allocations.
- Signature system for timesheets — secure electronic sign-off with a full record of all transactions and approvals.
- Analytics for budget control — track under- and over-spending in real time to support better financial decisions.
- Centralised Document Storage: Invoices, timesheets, contracts—all stored securely and easy to retrieve for audits.
- Audit-Ready by Design: When the Commission comes knocking, you’re already prepared.
With Kronis, costly mistakes are caught early—so your team can focus on impact, not paperwork.
Quick Compliance Checklist & FAQ
Want to stay stress-free at your next reporting deadline? Start with this quick checklist.
- Have you reviewed the eligibility of every cost?
- Is every invoice, timesheet, and contract saved in one place?
- Have all budget changes been officially approved?
- Are your organisational details up to date in the EU Portal?
- Have you cross-checked for double funding?
- Can you easily provide all supporting documents for an audit?
Download our free “Cost Mistakes Checklist & FAQ” for a step-by-step guide and never lose funding over a simple error.
Conclusion: Most Mistakes Are Avoidable
The best project teams aren’t just innovative—they’re also compliant. Make your next EU project a success with less stress and more results.
EU project cost management doesn’t have to be a headache. With Kronis, you gain the confidence that comes from knowing every euro is accounted for—and every rule is followed.
Don’t let small mistakes put your funding at risk. Let Kronis be your digital copilot for EU project compliance.
Ready to stop worrying about cost compliance? Download our Cost Mistakes Checklist
Eligible and Ineligible Costs: What Nobody Explains (And How to Get It Right)
The Real-Life Guide to EU Project Reporting Without Losing Your Mind (From Teams Who’ve Been There)
Keep Your EU Project Records Clean: Practical Tips for Success
