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• www.CPAPracticeAdvisor.com FROM THE TRENCHES By Randy Johnston Death and Taxes and Expenses ... 10 Key Tips Expense reporting can be painful, complex or simple, but rarely would I hear anyone suggest that expenses are pleasurable. Even those of you who avoid expense reporting have others in your organization who wind up doing the paperwork and accounting for you. Even today as I'm writing this column, I have an expense report to finalize from the prior day's consulting. What is your expense reporting experience like? How does it work for your clients? Can you advise people on a way to save time and minimize effort? What and How Do You Report? W hile the amount of travel and expense reporting that I have is no indicator of the norm, I'll suggest some of my experiences are like some of yours. First, recall that I own multiple businesses including K2 Enterprises and Network Management Group, Inc. I'm old enough that I have filed expense reports completely manually, as in before spreadsheets existed. Yes, I filled out the form, kept all of the appropriate documentation and had to have supervisor approval before making any expenditures and after incurring my expenses. We thought we had really advanced when we started using spreadsheets and had actual copy machines to keep a file copy of the expenses submied. It is fairly ordinary today that in a single trip, that I'll have expenses for K2 that have to be allocated to multiple jobs, expenses aributable only to an NMGI client, and split expenses on a single airline ticket for K2, NMGI and personal travel. My personal work habit is that I complete expense reporting prey much as the charges occur and finalize the report at the end of each week and/ or at the end of an engagement. Frankly, it is too easy to forget an expense has happened if it is not recorded on the day it occurred. We want to be able to bill for services, including expenses on the day the work is completed. is rapid billing can improve cash flow notably. Unfortunately, some clients want a receipt included for any expense of any amount regardless of the IRS regulations. Further, we could have a whole additional discussion about the time it takes to capture expenses as well as report them. Does that sound like a billable activity that capitalizes on your knowledge or is it simply a mindless task that must be completed? How do you minimize the time and still get all of the information needed? I have tried and am required to use a variety of products from vendors including, but not limited to: Concur, Tallie, Expensif y, Nexonia, Zoho, AccountantsWorld and more to be reimbursed. I use Time & Expense (T&E;) products that are integrated into ER P systems, project manage- ment systems, function as stand-alone systems and that integrate into a variety of platforms, partially as a learning experience and partially as a convenience. My needs include: • Capturing receipts from a variety of sources including mobile devices, email and scanners, • Dow n load i ng t ra n sac t ion s f rom multiple credit cards, • Matching and validating hotel, airfare and other larger expense items, • Conven ient ly capt u r i ng m i leage records, • Performing validation for internal control pur poses on transactions i nc l u d i n g l o c a t io n , a c c e p t a bl e expenditure ranges, authorizations and types of expenditures. is may include the need to OCR documents and extract the information from a receipt to match addresses or amounts against another source. • Having the ability to capture small cash transactions including tips must be easy. • Splitting a transaction to multiple clients, jobs and for non-reimbursable personal items needs to be easy. • Not keying client, job or description information is certainly a plus. At least matching a prior transaction or quickly picking an item from a list is a productivity gain. • H av i n g wor k f low a nd ap prov a l levels can make sense even in small organizations. Having configurable rules can enforce requirements for receipt documentation on charges above a particular threshold. • I nteg rat ion to ot her s y stem s for electronic transfer is certainly a plus. The ability to download credit card transactions, import reservations to pre-populate an expense report and exporting the expense summaries into an accounting system is a labor saver on both the front and back end. Note that all of these items just happen to be things that I deal with more or less weekly. You may only fill out an expense report when you travel to a conference or aend a meeting or CPE. You may not have any client- facing work that requires any expense reporting, but most organizations have at least a few people who have to deal with expenses oen. If each of those people can save 15-30 minutes/week on expense reporting, what could that mean in terms of productivity? W hat could it mean in the ability to get a bill out or to not "eat" expenses because it took too long to capture the information or there was not sufficient documen- tation? Could capturing and billing expenses properly result in greater billings or less cost? W hile I tend to be and prefer to be a revenue creation person that "fills the bucket", plugging the holes of expense leakage should mean more dollars flowing into the business and less dollars leaking from individuals. Although I won't name the orga- nization for this column, I reflect on groups that invite speakers and refuse to reimburse appropriate and custom- ary expenses. • w w w . C P A P r a c Randy Johnston is executive vice president and owner of K2 Enter- prises and CEO of Network Manage- ment Group, Inc. He is a nationally recognized educator, consultant and writer with over 30 years' experience. He can be contacted at randy.johnston@cpapracticeadvisor.com . O nly a few things in life seem to be sure: death, taxes and expenses. While I can't tell you how to avoid death, many pro- fessionals, likely even you, can explain legal strategies to avoid taxes. However, I don't know a way to avoid expenses. Not that expenses are necessarily bad, but sometimes expenses just have to be accounted for, reported and paid. CONTINUED ONLINE AT: www.CPAPracticeAdvisor. com/12248269