What’s more ridiculous than renting a yacht for a business meeting, spending thousands of dollars on fast food, or charging an engagement ring to your employer?
Answer: expecting to get reimbursed for any of it.
These outrageous examples (and more) were collected from accountants and business professionals in a recent survey from CPA.com and BILL Spend & Expense.
The survey report, titled From Expense Tracking to Spend Management: The Next Client Advisory Services (CAS) Opportunity for Accounting Firms, reveals some of the biggest WOWZA-worthy expenses.
While you might get a good laugh, the reality is that these are actual reported expenses.
Trucks, private jets, paperclips, and more
Just when you think you’ve heard it all, there’s always another no-way-that-really-happened example. Survey participants shared more than 600 outlandish expenses––and here are examples:
- An employee bought a new truck using the business credit card and quit the next day.
- An individual booked a private jet for a golf outing.
- An employee claimed a trip to Spain as a necessary expense to learn Spanish.
- $12,000 was spent at McDonald’s and submitted for reimbursement.
- An individual charged expenses for a business trip twice. The survey participant included a note saying, “The mistake could have been avoided if our expense tracking system was automated.”
Think those are troubling? Here are a few more expense requests that, because of limited space, didn’t make it into the report:
- A down payment on a Maserati
- A $10,000+ handbag
- A safari
- A client's son purchased sports cards with a company credit card
- Lottery tickets
To be fair, not all of the stories focused on pricey mistakes. One participant shared that, “... a large amount of paperclips [were] purchased on accident. In the grand scheme, it was not a lot of money—maybe $20 when it should have been $5.”
Modern spend and expense management for accountants and their clients
Is there a way accounting firms and their clients can deter expenses of this type? Yes, and it's about getting in front of the expense— not reacting after it's already happened.
The report mentioned above outlines the importance of proactive expense management instead of tracking expenses after they’ve happened.
What does a proactive approach for managing expenses look like?
Modern spend and expense management combines software and corporate cards to match anticipated expenses to budgets before the money is spent.
Here’s how the report describes it:
Expenses are typically recorded 30 days or more after they happen, blurring visibility into an organization’s cash flow.
Spend management technology leverages an integrated platform linked to corporate cards issued to clients and connected to preset budgets and spend caps.
Employee card transactions trigger real-time alerts to submit receipts, and expenses are automatically categorized and synced daily to the client’s accounting platform. Spend management technology also provides a web-based dashboard to track spend against budget at the department, project, or organization level.
How does modern spend and expense management software help prevent unauthorized expenses?
BILL Spend & Expense allows accounting firms and their clients to enforce spending guidelines before a cent is spent.
When you issue physical or virtual cards through BILL Spend & Expense, you can set spending parameters like which budgets, projects, and departments the card can spend on, along with spending limits and merchant controls. The transaction will only be authorized if a purchase matches the guidelines.
For company participants who outsource expense management services to an accounting firm and use spend management software, 96% agree that the combination enforces expense guidelines, and 97% agree that it ensures they control spend and stay within budget.
51% of SMBs owners who outsource expense management said their accounting firm implemented card-based spend management technology, and it has been a game changer for their company.
Why should accounting firms have spend management services on their CAS practice radar?
CAS offerings represent one of the fastest-growing practices in accounting firms, with a CPA.com and AICPA report finding that, “ … accounting firms which offered CAS services reported a median growth rate of 16% over the previous year, with double-digit growth being the norm since 2018.”
The survey report identified spend and expense management as an emerging CAS offering. It can provide a valuable and profitable competitive advantage while helping firms’ clients to increase spend transparency and control.
How to convert from traditional expense management
Not all expenses are causes for concern, with far more being necessary than questionable. For example, the purchase of a bottle of vodka would normally raise eyebrows. But for a theater, it’s used to clean costumes.
Regardless, a proactive approach to expense and spend management can help prevent outrageous purchases while increasing visibility into client spend. With the ability to set spending and budget limits, control card activity, and view all activity from a single dashboard, accountants can stay on top of their clients’ expenses while gathering real-time insight to inform cash flow management and more.
Learn more about offering spend and expense management services by downloading CPA.com’s full report.
You can also access the BILL Spend & Expense interactive demonstration, which highlights how simple it is to use and the benefits of managing a client’s business spend in one place.