Mind Your Money

Get a handle on expense reports.
Magazine Contributor
2 min read

This story appears in the April 2007 issue of Entrepreneur. Subscribe »

Companies have employee monitoring on their radar: A fall 2006 Society for Human Resources Management survey of 442 corporate HR professionals revealed that 46 percent had increased employee monitoring in the past 12 months or planned to do so.

Perhaps more surprising, however, is that 41 percent of these HR professionals have increased auditing of employee expense forms in the past year. Employers are stepping up their auditing for a variety of reasons: Sarbanes-Oxley has mandated stricter controls, companies are trying to keep their costs in line, and there's the prospect of public shame and criticism from investors over egregious employee spending.

Aestiva Expense Sheet, Databasics' ExpenSite, NeatReceipts Scanalizer and SagePro ERP Accounts Payable software packages allow employers to cross-check expense forms for red flags, helping companies tighten their grip on spending. Auditing employee expense forms "is definitely a trend," says Garry Mathiason, who chairs the corporate compliance practice group in the San Francisco office of Littler Mendelson.

If you're not verifying expense forms yet, you should start now. Think of expense report auditing as just one part of your company's overall compliance process and a good habit to get into as your company grows and perhaps goes public. Make sure employees at every level know what constitutes an acceptable expense. "Sometimes, employees just don't know what is and isn't deductible," Mathiason says. "The last thing you need is some kind of ethics scandal."

Chris Penttila is a freelance journalist in the Chapel Hill, North Carolina, area.

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