Goodbye, lavish lunches and no-expense-spared champagne dinners. Not only is the IRS cracking down on business expenses but, as the economy tightens, so are companies. It’s more important than ever for both sides of the expenses equation to keep track and to make sure that business expenses are legitimate and approved ahead of time. No excuses.
FastDue’s free expense report can be customized for a professional look and feel. It can be used to get business expenses either pre-approved or reimbursed from anywhere in the world via the internet. Heck, you can even use a SmartPhone or iTouch. That means you can get extras approved almost instantly, as well as using the form routinely.
Say you’re at a conference in Tokyo and discover that a side-trip to Kyoto could well net your client a great contract; or perhaps you’re a freelance graphic designer and find a much better (but more expensive) cardstock for a client’s brochures at the last minute. Both scenarios are outside the original agreed budget. Just fill out the expense form template, click to copy to as many people as necessary, and get your extra expenses approved rapidly with an enforceable “paper trail”.
Tip: When approving a business expense report, be sure that an employee or independent contractor hasn’t got around the agreed limit on a single item by splitting it into several items.
Road warriors on long trips can keep a rolling log and submit expenses periodically to get their accounts topped up. No more wondering whether you’re really going to get the cash the way the voice over the phone promised; and no chance of losing your scribbled accounts.
You can also use it to keep track of your own expenses for tax purposes.
Tip: The IRS requires that you keep the original receipts for any expense over $75. See ‘Types of Expenses’ for some great exceptions.
Tip: Pack a manila envelope whenever you go on a business trip. Every night, empty your receipts into the envelope after you’ve entered amounts on your FastDue expense report. When you get home, print out your free FastDue Expense Report for the trip and tuck a copy into the envelope to keep with your records.
Set up a free FastDue account so that you can access your expense data online whenever you want, wherever you want. E-mail a copy to your G-mail account for extra back-up.
Using our free expense template is intuitive and simple.
- Upload your own logo for a distinctive custom look, or use our default logo.
- Enter your clients’ information, including e-mail address, and click to copy form to accounting departments, etc.
- Choose the type of report—reimbursement or pre-approval—and pick a header message.
- Enter the date of the expense, the name of the job or trip (Southeastern Conference; Jones Family photography shoot; spa article).
- Choose a category from the drop-down menu—travel, entertainment, food or custom.
- Change the percentage to be reimbursed or pre-paid to the agreed amount. FastDue will automatically calculate totals.
- If negotiation proves necessary, use the messaging function to record comments and terms, e.g. expenses to be paid only in the event of a sale.
- Choose a payment method, agree to FastDue’s terms and conditions, set the Repeat Reminder function if desired, and send. That’s it.
Items that could be considered expenses range from ballpoint pens to yacht rentals, but more typically include:
Travel: Itemize airfare, mileage, and car rental as well as cab, bus and train fares. Add hotel and motel rooms; but room service and hotel restaurant meals should be subtracted and submitted with meals and entertainment since the IRS views them differently. Don’t forget dry cleaning and laundry.
Tip: Forget gas and oil change receipts: use the IRS’ mileage allowance (55 cents/mile as of writing) if your client or employer agrees.
Meals and entertainment: This includes meals while travelling as well as in-town wining and dining of client and may be reimbursed in part or in full by a client or employer. If you are recording expenses for tax purposes, remember that M&E are only 50% tax-deductible. Take as much space as you need to record IRS-required details about where you went, who you were entertaining and what business matter you discussed.
Tip: Simplify your bookkeeping. The IRS allows you to take a per diem allowance for hotels, meals and incidental expenses like laundry instead of keeping receipts while traveling. If audited, however, you must be able to prove that you were actually there (just dip into your filed envelope of receipts) and the 50% rule for meals and entertainment still applies. Your client or employer might want to agree to the same rates to reduce their own bookkeeping. Go to
http://www.irs.gov/pub/irs-pdf/p1542.pdf for US allowances, or call the IRS for international rates.
Office expenses: Phone calls, faxing from business centers, copying, etc.
The Electronic Signatures in Global and National Commerce Act, or E-SIGN, was signed into law in 2000 and provides a consistent legal basis for the validity of electronic signatures in all states, including those such as Georgia and Illinois that had not already enacted UETA, or the Uniform Electronic Transactions Act.
An electronic signature can be as simple as typing your name into the signature space and preserving the accompanying electronic paper trail. More complex (and therefore more secure) forms include iris or fingerprint scans and encrypted digital signatures that use Public Key Infrastructure (PKI) such as VeriSign.
Electronic signatures are valid for a wide range of applications; they are not, however, valid for wills, court orders and other court documents. It is always smart to keep a back-up paper copy.
If you have any concerns at all about using an electronic signature, simply use FastDue’s free interactive template and messaging system to thrash out the details of an agreement; then print out the final result and sign it in the traditional fashion. Consult your lawyer for further information.