Matching paper receipts with expense reports (or credit card statements) is a time-consuming tedious process that could be costing some of your clients serious dollars--and not necessarily for the reason you might assume.While it is true that the process can consume administrative resources in their accounting departments (or in your own firm, if you are handling their bookkeeping), there is another possible cost: Increased exposure to fraud.
The reason should come as no shock: Some employees find it hard to resist taking advantage of a corporate card for personal gain. For example, employees could purchase more items than they need and return the extra items to the store for a refund in cash…or sell the extra items online! Employees can also mask a personal purchase as a company purchase at department stores that carry both office supplies and personal-use items.
To perpetrate such an abuse, the employee simply omits providing a copy of the purchase receipt when completing a purchase. “I lost the receipt” is a common refrain. In that scenario, many of your clients probably prefer to give employees the benefit of the doubt and let it slide, barring any preexisting grounds for suspicion. But, in doing so, even in cases where no fraud was actually involved, your clients may harbor lingering suspicions that can sour the employer/employee relationship. Beyond that, the holes in expense documentation would reflect poorly on their financial control procedures, and come back to haunt them (or you) in a tax audit.
A better way
Various expense management solutions providers have developed receipt capture technology that attack the problem head on. When employees make purchases they capture an image of the receipt using any compatible mobile device, categorize it and submit it to management.
To help prevent fraud, choose a receipt capture solution that captures images through the application directly. This avoids editing of the image by the user prior to upload. With most receipt capture apps, the receipt images land in a secure online database with synchronization options with QuickBooks and other small business accounting solutions.
A timely reminder
When possible choose an app that prompts the card user to take a picture of the receipt immediately following a purchase. That way, your clients can easily maintain a “no excuses” policy for incomplete expense documentation. Employees who neglect to produce a digital copy of the receipt can ask the retailer to produce a duplicate, then send the duplicate receipt through their providers receipt capture app after the fact.
Should the employee fail to provide a receipt, the employer may be within their rights to request a reimbursement from the employee, or to provide some other recourse per their employment agreement. In the end these types of receipt capture apps empower your clients to fine tune and enforce purchasing guidelines for their employees.
Reducing the risk of fraud is just one of the many benefits of this incredible new technology. In fact, these technologies are designed primarily to simplify the expense reporting process and associated accounting tasks. Multiple expense classification options also make it easy for system users to sort and analyze the data. These solutions are also powerful tools for accounting professionals who provide bookkeeping services. Professional bookkeepers now have real time access to credit card purchases, with source documentation and import capabilities into QuickBooks. These solutions can save you as the professional bookkeeper countless hours of time, while representing your firm as on the technological cutting edge.
Want to learn more? Join Intuitive Accountant’s “Reducing The Risk of Fraud For QuickBooks Users" web seminar with Joe Woodard on April 29, 2014 at 1:00. Click here to register https://www2.gotomeeting.com/register/436252002