If you have team members that incur expenses as a part of their job, you’ll want to put some safeguards in place to ensure expense reimbursements or use of company credit cards don’t get out of hand. Here are five things to consider to control business expense reimbursements.

Implement Clear Expense Policies

Establish detailed guidelines for what constitutes legitimate business expenses. Clearly define acceptable expenses, required documentation, and reimbursement limits to ensure everyone understands the rules.

Use Expense Management Software

Expense management software will help to track and monitor spending in real-time. With most expense reporting software systems, employees will have the ability to submit documentation and expense details electronically as they occur. The software can typically pull in company credit card activity as it occurs as well, allowing employees to know if they are missing any support. These tools can flag unusual activity and ensure employees follow company policies, reducing the chances of fraudulent claims.

Require Detailed Receipts

Always request itemized receipts or invoices for reimbursements. This ensures transparency and prevents inflated or falsified expense reports. Detailed receipts also give you the ability to review purchases to ensure compliance with policy, and over certain limits, the IRS requires receipts or documentation for support.

Perform Regular Audits and Spot Checks

Conduct regular audits of expense reports and perform random spot checks. This helps detect patterns of unusual spending and keeps employees accountable, knowing their claims could be reviewed at any time.

Segregate Duties

Separate the responsibilities of submitting, approving, and reimbursing expenses. Having different employees handle each step reduces the opportunity for fraud, as no single person has control over the entire process.

 

Controlling employee expense reimbursements can go a long way towards improving your bottom line, and implementing these five things can help you get that control as a business owner. 

 

Written by: Shauna Huntington & Haylie Ridenhour