If you sometimes ask employees to pay a business expense and then be reimbursed, you need a good system for them to do this.
1- This minimizes the opportunity for fraud.
2- This ensures that they get reimbursed in a timely manner (it really isn’t okay to ask an employee to front your business money, then take forever to pay them back).
3- It creates a document trail in case you are ever audited by the IRS.
There should be a form that includes space for the date of the expense, the purpose of the expense, and the total. There should be approval initials for anyone in that decision chain. The employee should attach receipts.
It isn’t hard, but it should always be done.
If you want a copy of the policy and form I use with my clients, comment below or send me a message. I would love to share!