Your Finance Team

IRS Guidelines and Best Practices to Manage Employee Expenses

Employee expenses can be a challenge for finance teams to manage. Whether it’s keeping spend under control or making sure everything is properly tracked; it’s an area that creates headaches for all involved, especially if mismanaged or IRS rules are not implemented.

The more you know about requirements, options, and best practices, the more you can preemptively lessen the headaches.

See our dedicated page, “How to Manage Employee Expenses,” for more.

Benefits of Properly Tracking Employee Expenses

Tax deductions

I think this one speaks for itself, but most reimbursable employee expenses can be deducted on your taxes. However, in order to get this deduction, you need to make sure that you are keeping the right level of records according to the IRS. You also need to make sure that you are keeping your records for the amount of time required.

Budgeting & Forecasting

Understanding trends and patterns in your spend can help you optimize budgets and forecasts. Whether it’s consolidating purchases, purchasing licensing agreements or adjusting budgets – you’ll be able to plan more efficiently.

Managing Spend

By properly tracking your expenses, it’s a lot easier to make sure spending doesn’t get out of control and that it’s not being abused. There are also other methods for managing spend that help you prevent overspending before it becomes an issue.

Big Picture

When you track your expenses properly, you can tie them to other company activities and get a better sense of ROI for projects, events, and client spend. This adds an additional layer of value that the finance team can provide during the business decision making process.

Reference Guide for Everything You Need to Know About Employee Expenses

Finding the information you need can be challenging because it is dispersed across several sources – IRS documentation, accounting & finance resources, and in the minds of seasoned finance professionals – which is why we scoured each source to pull out the relevant information you need to properly manage employee expenses and created How to Manage Employee Expenses. This reference guide will help you at any stage of the process, whether it’s getting your expense policy setup or optimizing your existing expense management workflow.

We worked closely with our partners at Early Growth Financial Services to make sure that we covered the most important areas so that you can successfully track and manage your employee expenses. Staying on top of your expenses allows you to mitigate cash burn, make operational changes where needed, and be properly prepared for tax season.

 

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