Yes, receipts should be required for all credit card purchases, especially since it has become so much easier to keep track of receipts nowadays. We use the Spend Clarity application from Visa to manage our card expenses, receipts, and manager approvals. They even have an app where users can take a picture of their receipt using their company phone and upload it on the spot.
I imagine a smaller enterprise would be able to do something similar by setting up a shared folder for cardholders to upload their digital receipts. With today's technology, there is no reason to be swamped with paper statements, receipts, or approval forms anymore.
Original Message:
Sent: 07-15-2024 09:02 AM
From: Thomas Meisenzahl
Subject: Small business expense tracking
Hi, Nellyreth:
Our company use two different types of credit cards for purchases: a travel card and a purchasing card.
Travel cards are managed through the SAP Concur system which manages the controls necessary to maintain proper documentation. Not all companies have access to Concur, but a quick online search shows many similar style products available. This system requires users to complete an expense report with the pertinent data to fulfil tax requirements as well as company policies.
Purchasing cards are handled through the Bank of America Works system. This system is rather easy to use and track all purchases for non-travel related items. This tool is invaluable to our business. Every expense is listed and breaks down the sales tax from the invoice amount. It also allows the user to select the appropriate expense account to charge the invoice amount. The system also has controls which can require approvals and accounting sign-off, as well as monthly and per transaction limits which can be adjusted as necessary for one-off items. What I like best is we print a monthly report which contains a line item for every purchase and splits the cost and sales tax paid. For lines items without sales tax paid, we accrue and pay use tax.
The accounting sign-off is our way of tracking the receipts. Users are required to generate a PO for each purchase and verify and code their own receipts into the Works system, however we have a few which need help. Those individuals drop off their receipts and PO's to Accounts Payable for account coding. (My advice is to train each user on the procedures you need for control and your own sanity.) At the end of each month, all receipts are submitted to Accounting for file review and storage. The beauty of the Works system is Accounting controls the user's cards. Have a user who will not submit invoices, suspend the card until the documentation is submitted. Overall, the system works very well for our business and helps us to track those expenses for purchases where we do not have vendor terms. Your bank may offer a similar system.
Hope this information helps. If you need anything further, please let me know.
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Thomas Meisenzahl CMA, CSCA
Controller
Johnson Matthey
Sevierville TN
United States
Original Message:
Sent: 07-10-2024 02:25 PM
From: Nellyreth Durango
Subject: Small business expense tracking
Thank you for creating this platform to post ideas and questions about our profession and to collaborate with other peers!
I am a CMA working for a start-up company where I manage all aspects of accounting, including Accounts Receivable, Accounts Payable, Financials, Lease Accounting, and more. Throughout my career, I have worked for various companies of different sizes, often in environments where specific accounting tasks were handled by separate individuals.
My current employer, a software company, started just about two years ago, and I was the seventh person hired. In this role, I face the unique challenge of managing expenses that are often paid directly by managers using their credit cards, with these expenses typically ranging between $15K to $20K. To ensure proper record-keeping, tax compliance, and readiness for future audits, I have been maintaining a practice of requesting receipts for all expenses above a $75 threshold.
As someone who has always emphasized the importance of detailed receipts from everyone, from VPs to assistants, I find myself at a crossroads in today's fast-paced, tech-integrated environment. When I used to travel, I was required to provide receipts for all expenses, no matter how small. However, I am curious about current practices and whether auditors still require backup documentation for routine monthly expenses, especially credit card charges, which constitute the majority of my current expenses.
In a world where we aim to streamline processes and integrate AI tools into our workflows, how stringent are the requirements for maintaining receipt backups for these types of expenses? I want to strike a balance between being flexible and ensuring that we have sufficient documentation for tax purposes and potential audits.
I would greatly appreciate any insights or advice from fellow professionals on how to navigate this situation.
Thank you for your comments and suggestions!
Best regards,
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Nellyreth Durango CMA - CPA (Colombia)
Accountant
Broomfield, CO
United States
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