Does Expense Reporting Have to Suck?
Let me start by saying, I love my job. I work with businesses all over the country helping them better understand their numbers through bookkeeping and management consulting services. We collaborate with them, coach them, and connect with them in business and socially. But, for some reason, that all goes out the window once we start talking about expense reporting.
I instantly become the company nag or babysitter. That is the last type of relationship I want with my clients, but it seems like a necessary evil. Why, you may ask? Because I have to make sure that all the necessary information is present, makes sense, and that people aren’t taking advantage of the business all at once.
Here is a snapshot into my life as an accountant when it comes to dealing with clients’ expense reports. Let me know, too, if this sounds like you:
Step 1: Receiving the “completed” expense report from the employee.
Most employees hate expense reports as much as accountants do, so I tend to send out email reminders to clients and their employees to make sure we get their completed reports. When I finally get one, I open up a 20-some-odd-page expense report in a PDF format.
The first page is a summary of all the expenses. The following 19 pages are copies of receipts laid out in all different positions on the pages. I know full well that I’m going to end up emailing this employee questions about the report, so I get a draft email started. Employees tend to hate it when they are questioned about their spending, so this process is never easy even though I have the best of intentions.
Step 2: Is the support there for each expense?
I start with making sure I have all the receipts that are listed in the expense report. I don’t really want to print out the 20 pages, so I’m trying to do this in my PDF viewer. I have to flip back and forth all over the place. I highlight the numbers on the summary page once I see the receipts.
There are a few receipts missing. Some of the copies have either the top of the receipt with the name and date or the bottom of the receipt with the amount cut off. Add these notes to the draft email to the employee.
Step 3: Does the support make sense for the expenses?
This is where my mind starts going into the “OMG!” “Seriously?!” and “I give up” state. Accountants really get to see the inner workings of companies when it comes to reviewing expense reports. We see the golf trips, the cigar shops, the huge marketing expenses, and the like.
Now, a fair amount of these expenses are legit, but the brain does funny things, especially when you are knee deep in the details. I try not to judge, but what I do need to do is make sure that these are reasonable business expenses and that the business is OK with these. How do I do this? I ask open-ended questions to the employees such as: “Can you explain the golf trip on X date and its business purpose?”
Step 4: Does all the support add up?
So, I’ve gone through all the line items and matched the receipts - except for those few outliers. Now I enter the report as a bill into the accounting system. I like to provide my clients with the detail of the transactions, so I do this line by line. Here is the funny thing that happens with a lot of those Excel expense reports. After entering each line, the total doesn’t match the summary page! Yet another thing I need to go back to the employee with because the total could be off by a few hundred dollars and they are going to freak out when they don’t get reimbursed what they were expecting.
In summary, my email response to the client ends up being something like this (again, let me know if these sound familiar):
- “I don’t see receipts for the following expenses, can you provide those?”
- “The receipts for these expenses were cut off, can you rescan these and send back to me?”
- “Can I get a little more detail on the golf trip you had on X date and its business purpose?”
- “What was the $3,000 technology purchase for? It just says ‘office supplies.’”
- “It looks like there was an adding error on your summary page. The total of the lines is off by $200 from the total listed on the sheet. Is there something I’m missing?”
I can completely understand from the employee’s perspective that this is a total “pain in the ass” email to answer. They already spent an hour or more getting all this information together and why is “accounting” now questioning them? Unfortunately, that’s my job! Yep, just call me the company nag!
How can accountants make expense reporting better?
Once I start to see my time is consumed more and more with these detailed and not-so-fun conversations, then I start to look for ways to make life easier on all of us. This is where different technologies and systems come into play, like one of the many expense reporting apps on the market. They are often free or cheap and take a lot of the sweat and stress out of these oft annoying, yet useful duties.
Granted, I still have to babysit and nag from time to time, but [using expense reporting apps] makes the process go by faster and it gets me back to all the fun advising and consulting work.
So what are your pet peeves about expense reporting? How do you deal with being the company nag? What are some of the best practices you have to make expense reporting better?
About the author:
Cathy Iconis, CPA and QuickBooks ProAdvisor, is CEO and client finance director of Iconis Group, a virtual CFO, bookkeeping, and business consulting firm.
Cathy is an Advanced Certified QuickBooks Online ProAdvisor, CEO of Iconis Group, a bookkeeping and business consulting firm, and founder of #QBOchat.