Accounting Best Practices, Fifth Edition

3–17. Audit Expense Reports

A labor-intensive task for the accounts payable employees involves carefully reviewing every line item on employee expense reports, comparing everything to the company policy for allowable travel or entertainment expenses, and then contacting employees regarding inconsistencies prior to issuing a check. For a large company with many traveling employees, this can be an extraordinarily labor-intensive task. Furthermore, most employees create accurate expense reports, so the labor expended by the accounts payable staff is rarely equal to the cost savings all the review work generates. To make the situation more unbearable for employees, the expense reviews take so long to complete that there can be a serious delay before an employee receives payment for a check—especially if the expense report is rejected due to reporting failures by the employee, resulting in the expense report moving back and forth several times between the employee and the accounting department before it is paid. When there is so much document travel time, it is also common for the expense report to be “lost in the shuffle,” meaning that the employee may have to create the expense report all over again and resubmit it. All of these factors result in an inefficient process in the accounting department and lots of angry employees who are waiting for reimbursement.

The solution to this problem ...