To properly manage your business, sample expense report policies are necessary. These policies will assist you in determining the correct way to handle your business expense reports and account transactions.
Expenses for your business can be paid out directly from your bank account. They may also be paid out through a line of credit, a prepaid debit card, or checks which are drawn directly on your bank account. Regardless of how your company makes its payments, the transactions that it will pay out to other businesses must be reported. This is where your sample expense report policy comes into play.
Sample policies include how you will make payment for expenses to your business. For example, if you send a check to the next client, that check will have to be made out directly to your business. To pay with a check from a checking account, the bank that issued the check must write a check directly to your business, otherwise known as a cash advance.
The bank, however, must then write a personal check to you for the balance amount of the check you have written out to your business. If you opt to have this kind of payment in place, the bank must still write a check to you for the balance amount of the check and must deposit the check into your business’ account as soon as possible.
If you do not choose to use cash advances to make payments on business expenses, your business will pay out the balance amount of the check to the business directly. One possible alternative is to send your invoice directly to the business, and ask the company to write a check on your behalf. This will allow you to keep your business’s actual expenses separate from any business expenses you are personally paying out.
Another situation in which your sample policy may apply to is when a company pays you for business expenses that you have charged directly to your business account. Sometimes you are able to arrange for these types of charges, such as with cash advances, to be billed to your business account. In these cases, the company you pay should write a check directly to your business.
Depending on the circumstances, your sample policy may also cover when a company pays you for business expenses that it is authorized to bill directly to your business. When you have a card like a prepaid debit card for your business, the bank can issue you with a check for a percentage of what the company has drawn. In some cases, you may be allowed to maintain an open bank account which allows you to pay in your own check, instead of getting a direct debit from the bank.
Implementing a sample expense report policy into your day-to-day accounting may not be that difficult. While it may take some time to complete the effort, it is well worth the time investment to ensure the correct information is reported for tax purposes.
