CEO Expense reporting

My favorite control mechanism, although it only works in early stage companies: Don't give them a corporate card. Yes, there is nothing as motivating for receipt collection and T&E completeness than making people pay out of their own pocket first and then reimbursing them ex post facto. In fact, I use this at every company I go to as a control mechanism. As the companies grow you "must" give the CEO and heavy travelers their corp cards, but everyone else, forget about it! Trust me, you've never seen such compliance!

Simon, as CFO's we typically hold ourselves to higher standards than others to ensure our integrity is never at issue. Certainly CEO's should be in that category. Ever since my Apple Computer days in the 90's, when then-CFO Joe Graziano required two levels of signoff on the Executive team's expense reports (one up and Internal Audit), I have always adopted a policy that the CFO's and CEO's expense reports must be approved by a Board member, or if available subject to 100% Internal Audit review (in fact, its quite surprising that HP doesn't have this control requirement.) One VC I knew required Investor receipt of c-team expense reports on a quarterly and another recommended a random shift of peer review (i.e., the CFO would designate who reviewed whose expense reports each month or quarter.) Most of the CEOs I have worked with have appreciated this transparency.

I have found it useful to have the CEO's Admin ask the CEO to just give the Admin all the receipts,itineraries,bills and the Admin fills out the Expense Report. Since the Admin has no vested interest in filing an inappropriate expense report the report is usually correct. I also find Admins will cross off out-of -policy items off of CEO hotel bills for instance if they have a written policy and have been told to follow it.

Do away with Petty Cash immediately. In this day and age where everyone accepts Credit or Debit cards there is absolutley no reason for it. At my prior employer the CEO and only the CEO had access to $1,000 Petty Cash account and lo and behold, wouldn't you know, every week his driver turned in an expense statement for exactly (you guessed it) $1,000! Pretty amaxing that some weeks a stick of chewing gum would cost $0.05 and some weeks they were $1.00, whatever it took to round it out to $1,000. Here was a guy making almost $3 million in comp and still ripping the company off for $1,000 (or the better part of) each week. (he would occasionally sneak a legitimate expense in there). Give them a corporate card and have the statement go directly to the head of IA, and like any other employee the card gets canceled when they are late in turning in receipts. Ah=fter that they have to use a personal card and wil only get reimbursed when they turn in receipts and an expense report. Major items such as airline tickets and hotels (airline tickets were generally the biggest single dollar item) can be paid for directly by the company.