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Thoughts on Credit Card Statements as Back Up for Expense Reports Instead of Original Detailed Receipts

Worked at a previous company that would not allow this. You could use the statement if you lost a receipt and wrote a memo to accompany the expense report. New company I am at, the Corp Controller was okay with the employees turning in a detailed expense report, but the receipts could be the credit card statement.

Answers

Steve Sheridan
Title: Associate
Company: Dean Lewis Associates
(Associate, Dean Lewis Associates) |

One potential problem with just using the statement is that an employee could go to something like a gas station and buy $50 worth of products instead of gas. If the statement just shows the gas station name the employee could list it as gas. The same problem could exist with gift card buying as well. Stores nowadays sell gift cards to many places, and the statement may just read "Staples" and you'd never know they didn't buy office supplies.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Anon
Maybe ask your auditors and check the IRS regs as to what is acceptable by way of evidence.
We require the itemized receipt so that there is no doubt about what the expense is.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Most of the expense software provide "standard" receipts for under either the higher of the IRS ($75, unless lodging) or company requirements.

IRS Pub 463 (2015) Chapt 5.

What Are Adequate Records?

You should keep the proof you need in an account book, diary, log, statement of expense, trip sheets, or similar record. You should also keep documentary evidence that, together with your record, will support each element of an expense.

Documentary evidence. You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses.
Exception. Documentary evidence is not needed if any of the following conditions apply.
You have meals or lodging expenses while traveling away from home for which you account to your employer under an accountable plan, and you use a per diem allowance method that includes meals and/or lodging. ( Accountable plans and per diem allowances are discussed in chapter 6.)

Your expense, other than lodging, is less than $75.

You have a transportation expense for which a receipt is not readily available.

Adequate evidence. Documentary evidence ordinarily will be considered adequate if it shows the amount, date, place, and essential character of the expense.
For example, a hotel receipt is enough to support expenses for business travel if it has all of the following information.
The name and location of the hotel.

The dates you stayed there.

Separate amounts for charges such as lodging, meals, and telephone calls.

A restaurant receipt is enough to prove an expense for a business meal if it has all of the following information.
The name and location of the restaurant.

The number of people served.

The date and amount of the expense.

If a charge is made for items other than food and beverages, the receipt must show that this is the case.
Canceled check. A canceled check, together with a bill from the payee, ordinarily establishes the cost. However, a canceled check by itself does not prove a business expense without other evidence to show that it was for a business purpose.
Duplicate information. You do not have to record information in your account book or other record that duplicates information shown on a receipt as long as your records and receipts complement each other in an orderly manner.
You do not have to record amounts your employer pays directly for any ticket or other travel item. However, if you charge these items to your employer, through a credit card or otherwise, you must keep a record of the amounts you spend.
Timely-kept records. You should record the elements of an expense or of a business use at or near the time of the expense or use and support it with sufficient documentary evidence. A timely-kept record has more value than a statement prepared later when generally there is a lack of accurate recall.
You do not need to write down the elements of every expense on the day of the expense. If you maintain a log on a weekly basis that accounts for use during the week, the log is considered a timely-kept record.
If you give your employer, client, or customer an expense account statement, it can also be considered a timely-kept record. This is true if you copy it from your account book, diary, log, statement of expense, trip sheets, or similar record.
Proving business purpose. You must generally provide a written statement of the business purpose of an expense. However, the degree of proof varies according to the circumstances in each case. If the business purpose of an expense is clear from the surrounding circumstances, then you do not need to give a written explanation.

Sarah Jackson
Title: Associate Editor
Company: Proformative
(Associate Editor, Proformative) |

Proformative has some highly-rated courses on managing reimbursable expenses.

Best... Sarah

Anonymous
(Founder & CEO) |

Wayne,

What about in the case of a sales tax audit of the employers expenses? If the employer only has the bank statement as proof of purchase, how can it show that sales taxes were paid on the purchases? Many employees of small firms go out and buy things that might be costly, like computer equipment for example, and if the employer does not have a tight policy around the supporting documentation for these purchases, it may end up accepting a bank statement plus the physical existence of the item purchase as support not anticipating a potential use and sales tax audit. What are your thoughts on this?

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

The IRS regs I quoted above stipulate receipts are required for anything OVER $75. So there shouldn't be an issue.

I also stated that the corporate policies could be tighter (say $25).

In addition, many if not all of the SAAS based systems allow you to use your smart phones camera to take a picture of the receipt, thus eliminating little slips of "paper" and if you print out the report you'll have physical copies of the receipts.

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