In 2002, Congress passed the Sarbanes and Oxley Act, or SOX, which requires thorough documentation of expenses. It was passed to protect shareholders, by ensuring that if there are financial issues within an organization, they are easily spotted during the audit process and do not snowball into larger problems. When there are serious issues, companies are given a grace period to make changes and if those alterations are not made, it must be included in the company’s annual report. What does that mean for your company? Recurring expenses, like T&E must be properly tracked so that you are in compliance. Here are some tips on how to accomplish this:
- Be sure to track employee bills and note taxes paid on these expenses for future reference.
- Have a system in place to have all travel approved beforehand so that it can be effectively managed.
- Keep T&E records for at least 7 years, because you may have to produce them.
- Make sure any records are secure and easy to access in case of an audit. You don’t want to have to scramble to pull reports together.
- Set and enforce T&E policies so that all expense reports follow the same guidelines.
For more information, visit these articles on the SOX act: https://en.wikipedia.org/wiki/Sarbanes-Oxley_Act https://searchwinit.techtarget.com/news/article/0,289142,sid1_gci1062934,00.html https://www.aicpa.org/pubs/jofa/sep2003/mcconn.htm