Business Receipt Management – ExpenSys
Why do you need receipts?
It is necessary for claimants to obtain receipts whenever possible in order to satisfy the local tax authority that expenditure is business related. Otherwise there is no proof that the reimbursement is not a taxable ex-gratia payment.
However, it is not always necessary for Approvers to view receipts – so long as the information necessary to validate the expenditure from a business point of view has been recorded.
Does it need to be a VAT receipt?
Only for items where VAT may be legitimately recovered. Most VAT cannot be recovered in any jurisdiction unless the employee has obtained a valid VAT receipt. What constitutes a valid VAT receipt varies from territory to territory. ExpenSys is the only application in the world that displays this information to the user on-screen at point of entry based on the jurisdiction in which the purchase was made.
Visibility of receipts is helpful for approvers and administrators, but this cannot be relied upon to determine the tax treatment for any given item, especially across multiple territories.
Exploding a few myths on Business Receipt Management
‘It is always necessary to keep the paper receipts’
Not true: Most tax jurisdictions no longer require that paper receipts are retained – so long as there is a clear and legible image, securely held.
‘It is always necessary to provide a paper receipt to recover cross-border VAT’
Not always true: The paper receipt must be kept and may be called for in the event of a query, but in most jurisdictions it is not required when making the claim. Within the EU it is necessary to provide an image of the receipt for items above a certain amount – and the amount varies between jurisdictions.
‘The only way to determine that account codes are properly allocated, tax treatment is correct and recovery of VAT is maximised, is to physically check the receipt’
Also not true: Correct allocation of account codes and tax compliance is normally determined by ‘purpose’. The purpose of the expenditure is not recorded on the receipt.
‘Approvers must view every receipt’
Not necessarily true: If the data collected at point of entry is sufficiently detailed and clear, then everything the approver needs to approve the item should be present.
It is clear that if the receipt were present on screen, the approver would have the option to view it, and administrators would not need to sort through, and then store physical documents.
With ExpenSys you have Choice
ExpenSys offers a variety of methods to assist with receipt management:
The ExpenSys Smartphone Application enables the capture of a receipt with the camera on a smartphone or mobile device. Upload to ExpenSys is automatic at the click of a button. If a connection to the server is not currently available, then the image will remain on the device until next time you have a connection.
The receipt image appears in a picture gallery individual to each user and accessible from each claim item. The appropriate image may be selected with a single click and will appear on-screen attached to the relevant item.
Claimants may scan receipts to the desktop, and then upload them via a browse function in the gallery.
Receipts may be placed in a pre-addressed envelope and sent to a central facility for scanning. This could be an internal facility, e.g. Finance, HR Department or Post Room, or an external scanning bureau. The images may then be batched into PDF documents and uploaded via FTP direct to the ExpenSys server.
A barcode may be printed upon submission and posted with the receipts. When scanned, this enables the receipt images to be batched and automatically associated with the correct claim.
External Audit Unnecessary
Old fashioned manual auditing of receipts is unnecessary. With ExpenSys, business policy is properly established at point of entry, and all VAT recovery, however complex, is automatically calculated.
Control of Non-Receipted Spend
Expenditure without receipts is highlighted. Thresholds may be set to indicate the level at which the absence of a receipt becomes an exception to policy.