As your company grows, the number of expenses and purchases grows. At a certain point, it may make sense to give employees the ability to make purchases on behalf of the company. But it’s important to manage this process carefully. In this episode of MissionBusinessPodcast.com, Bernard Roesch explains the logistics of how to run an employee expense process, including some of the risks involved and software to use.
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How to Give Employees the Ability to Pay Expenses
If you have a small company and there are just occasional expenses, the process can be quite simple.
- You can simply allow employees to charge expenses to their personal card and then have them submit a form to you to get the expense reimbursed.
- This avoids you needing to set up corporate cards and manage who has access to these cards to make purchases.
- The downside of this simple approach is you lose the transparency you would have by having access to the source transaction data.
- For example, if employees make purchases on your own corporate credit card, you have access to the credit card statement to see deeper details about those transactions. You don’t have this level of detail with an employee’s personal credit card.
- Also, if the employee were to get reimbursed for an expense and then return the item for a refund, you would not have a good way to know that.
- The best option is to use company credit cards that you provide to specific employees.
You can set up a master corporate credit card account and give specific employees cards that draw from that credit card account. Each employee card can have an individual credit limit and you can monitor spending by employees. The employee would submit an expense report and you can then reimburse them or the corporate credit card.
Employee Expense Software
Running this type of process manually takes a lot of time. It’s best to use employee expense recording software. There are multiple software options but they usually work like the below.
- When employee makes a purchase, they take a picture of the receipt. This stores the receipt in the software for future use.
- At the end of the month, the software can connect to the credit card account and download the transactions. The software can then match transactions to the receipts the employee has already taken pictures of.
- The software can then compile a report for the accounting department, and the accounting department will have everything that they need. They’ll have the original credit card transaction, a copy of the receipt and any other details they need.
- The accounting team can use this information to code the expenses appropriately in QuickBooks, and some of this process may even be something you can automate.
Need Help Setting Up An Employee Expense Process
Doing this manually will take a lot of time, and it can seem complicated to get up and running. If you need help setting up an employee expense process, contact Bernard today. He can talk you through the process and make sure that your payroll is managed accurately and efficiently
You can also visit MissionBusinessPodcast.com for more insights that Bernard has been sharing with us in the previous episodes.
Looking for the right QuickBooks program for your business? MISSION Accounting can help.
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