Keeping track of all business expenses is the most important task for anyone who works in accounting. One thing that can be a little tricky is keeping track of individual employee expenses. Below are a few things that can help make the task a little easier.
Use Controlled Business Credit Cards
Businesses often have a specific budget amount set aside to pay for business expenses. If a business owner has not set a specific budget amount yet, it is best to do this first. Business owners can apply for a business credit card (or several that share the same number) that have a set limit to them. Depending on the business’s credit score, there should be several points at which the business owner can choose to top off the card, usually in $500 increments. Employees will not be able to spend past this point, which can help to better manage business finances.
Make Scheduled Payments
If employees have recurring expenses, accountants can set up scheduled payments to make sure the same amount of money is paid at the same time every month. This keeps everything as consistent as possible. A good way to check for these types of employee expenses is to review former invoices. The more organized past invoices are, the easier this task will be.
Check for Expense Report Fraud
Employee expense report fraud is rare, but it does happen. Luckily, there are things accountants can do to check for fraud. Accountants should require employees to turn in receipts with every expense report, no matter how small the purchase or how the purchase was made (cash, check, or card). However, computer-savvy employees may be able to make fake receipts. So, if a receipt doesn’t look right to you, go with your gut and investigate it. Calling to verify the purchase with the vendor is one way to do this. Showing the receipt to another accountant can also help.
Putting a stopping point on employee credit cards, making scheduled payments on recurring expenses, and collecting and checking over employee receipts are all things accountants can do to limit and observe employee spending. Setting up an employee credit card only needs to be done once. Depending on the vendor where the recurring expenses are from, that may also be a one-time task for an accountant. Employee receipts should be collected after every expense, and strange-looking receipts should be investigated whenever they appear.