It is a common question both in personal life and business life. 'Where did the money go?'. The first step is knowledge. You cannot manage what you do not know. For a business, the identification of T&E Expenses is easier if some automated system of collection is in place, but absent that it can be an onerous manual process.
If an automated process is in place, make sure that you are capturing the necessary detail. Do all expenses get entered? Are the expense categories too general (or too specific)? If the users do not enter accurate data because the system it takes too much time then it is not much better than no system at all. You should also keep in mind the level of detail that is necessary from a financial perspective. Are there expense that do not get classified at all (good old petty cash)? Are there expenses that are categorized too broadly (e.g. airfare, taxi, hotel and meals all categorized as 'travel')? Use the reports available in your system an verify that you are capturing all necessary categories.
If an automated process is not in place, you need to ask the same questions but summarizing the expenses and getting totals is a manual process generally done with a spreadsheet.
The next question is if all expenses are being captured? Are there company credit cards that have transactions not reflected in a report? Does everyone enter expense reports?
This is the time make any changes to the classifications and processes to ensure that all T&E expenses are captured and are valid expenses. Even those companies not impacted by Sarbannes Oxley should ensure that these expenses have the necessary audit trail. Another upside for an automated process.
Just for laughs some of the things people have submitted as expenses. Unrestrained Expenses
What is the craziest thing you have seen on an expense report?
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