Why now is the time to prepare your expense management for Tax Day
What’s the best time to streamline your expense management process before Tax Day?
Sooner rather than later.
Rather you have a small business or a huge corporation, hitting an IRS tax deadline is stressful enough at the best of times but this year things were more heated than usual.
That’s thanks to the Internal Revenue Services website deciding to crash during this crucial period of the financial year with businesses left struggling to submit details.
Thankfully, the system was quickly restored and the April 17th deadline was extended by one day to help those affected by the system failure.
It acts as a timely reminder of the importance of staying on top of financial accounts and not leaving IRS related tasks to the very last minute. And one area where this happens is with travel and expense reimbursements as finance teams rush to get information together in the weeks before the deadline.
But the right time to start preparing for Tax Day isn’t as the deadline is looming, it’s right now. So if you’re still recovering from the strains of Tax Day, here’s a look at ways to take the pain out of expense compliance:
Make the best use of expense report technology
If your business still relies on paperwork and Excel spreadsheets to handle reimbursements then it’s time to update your systems. What makes IRS reporting so challenging is the administrative task of collating accurate information.
With a traditional expense report setup, reporting has to be done manually with information having to be pulled together from multiple documents, receipts, and accounts.
By switching to a cloud-based system, all of the reimbursement or credit card information is automatically generated and stored, allowing instant & centralized access. Webexpenses features an integrated reporting tool that allows reports to be created in a matter of seconds allowing for access to actionable data.
Ensure costs are legitimate
If costs are exaggerated, falsified or duplicated, you need to tackle them before they get anywhere near IRS. This requires having a robust reimbursement or corporate card policy in place and the means to enforce it.
It’s an area where technology is helping to empower finance teams. Cloud-based systems allow policy checks and reminders to be delivered via on-screen messages.
These checks are automatically logged, providing evidence that adequate steps have been taken to ensure that costs being claimed are legitimate business expenses and within your easily educated business policy.
Keep control of categories
Trying to untangle a confusing list of expense categories is one of the painful tasks that’s best avoided as reporting deadline approaches. A common problem is for a multitude of different costs to be filed under a ‘miscellaneous’ category.
While creating new categories can be an administrative headache when using a manual approach to expense management, it’s not a problem when using a software solution that cascades changes through the system.
With processes automated, it allows as many categories to be created as is necessary. It allows the IRS to be provided with clear and accurate information on each business expense or cost.
Have access to accurate mileage tracking
Managing mileage claims and trying to ensure that you have accurate information about road journey costs can be particularly time-consuming. Typically this has been done via employees estimating distances traveled.
A faster and more efficient approach is to keep track of journeys digitally, using a cloud-based management system. With Webexpenses, an expenses app is used to record exact point-to-point distances with mileage reimbursements built-in.
It protects against falsified journey details distances and ‘rounded up’ costs and provides the IRS with reassuringly accurate information.
Make sure data is securely stored
As we saw with the IRS website, systems do have a habit of breaking down at the worst possible time. It’s important to make sure that any reimbursement information is safely stored and backed-up.
With a cloud-based system, this is something that’s covered by the service provider but on-site data back-ups of information can be easily created.
Webexpenses allows for any data stored within the system to be exported in multiple report formats such as Excel, CSV, PDF, and XML. Paper receipts can also be stored in a more convenient digital form.
So by making sure you have the right system in place and have access to the information IRS needs, you can start to remove the strain from your next Tax Day on April 15.
With effective automated cloud-based management of reimbursements and corporate card reconciliation, there’s no longer any reason for those last-minute races to hit IRS deadlines. Find out how webexpenses can help your business take control of costs today.