Anyone who has ever submitted an expense report after a business trip knows how stressful it can be to scramble to find receipts for everything – from taxi rides, to lunches, to late-night fast food meals. Requiring these receipts can be a burden to your employees, who are already exhausted from travel – the last thing they want to do is rifle through their bags and pockets for every single receipt. At the same time, auditors don’t want to have to verify these nominal transactions that hardly break the bank. So how do you make the expense reimbursement process easier on your employees and auditors?
With the exception of lodging, we recommend considering a $75 threshold for receipts on entertainment, meals, gifts, and travel expenses. This is in accordance with current IRS guidelines, which requires receipts for any expense $75 or greater. Implementing this policy change will greatly help travelers – with fewer receipts to track down, travelers will be more inclined to submit their expenses in a timely manner.
It will also save a lot of time for auditors. Let’s say it takes an auditor roughly of 2-3 minutes to properly review an expense line and check the corresponding receipt. This manual review process, especially during month or quarter end, can limit an auditor’s effectiveness. If you typically have 300 taxi receipts submitted in one month, that’s a total of 10 hours of auditor review time. Imagine what an auditor could accomplish with 10 extra hours!
Luckily, AppZen’s AI already streamlines the review process, but by eliminating the need to review receipts under $75, employees will feel less scrutinized. Even without a receipt, AppZen will still verify the merchant to verify if it’s a legitimate business, look up tagged attendees on a gift or meal to see if it is a person of interest that could leave you exposed, and keep track of an employee’s expense history to identify bad actors and trends of misuse over time.
IRS regulations may vary by country or region, but if you reduce the number of low-value receipts your auditors need to double-check, they can focus more time reviewing high-value, complex items.