Next year is sure to shift the processes and strategies organizations in every industry use to govern their corporate travel. Here are a few trends to look out for as we head into 2018.
Recently, a number of different factors have influenced corporate travel. From the current geopolitical conditions to leveraging available traveler data, companies are seeking ways to streamline employee trips while ensuring the business stays on budget.
Next year is sure to bring even more changes, shifting the processes and strategies that organizations in every industry use to govern their corporate travel. Here are a few trends to look out for as we head into 2018:
Travel Programs Increase to Support Retention
Although travel saw a decrease in recent years due to technological disruptions like video conferencing, experts predict that face-to-face interactions on the part of employees with customers and partners will rise in 2018.
Issa Jouaneh, American Express Meetings & Events senior vice president and general manager, predicted that next year will see an increase in travel as part of talent competition, recruitment, and retention strategies. Travel that enables staff members to complete work and further the company mission from a desirable location may also become a more sought-after perk.
"As competition for talent heats up, employers will look to travel programs as meaningful benefits for employees who want to take advantage of business destinations, have a productive trip, and get home safely," Jouaneh said. "The line between traveling for work and leisure is continuing to blur for many travelers, and companies will find that developing programs that offer a more flexible work-life balance will attract prospective employees, and keep current employee morale high."
This type of approach can also allow businesses to hit two birds with one stone — not only can client and partner relationships be improved with face-to-face interaction, but when these meetings are in an attractive place, it benefits worker satisfaction as well.
Higher Focus on Security and Risk Preparedness
While mixing business with pleasure may increase next year, this step won't happen without appropriate risk management and security planning. This is particularly true for organizations whose employees take corporate-sponsored trips outside of the U.S. — it's more critical than ever to consider the current conditions of the region to which workers are traveling.
Reporting on Advito's 2018 Industry Forecast, BCD Travel noted heightened concerns surrounding travel risk and security, especially given the current geopolitical situation involving the U.S. and other foreign nations. In addition, any changes to visa and immigration regulations which may impact employees' travel abroad should be taken into account with risk preparedness as well.
"Corporate travel departments must keep up with what's happening in geopolitics and understand how political upheavals, natural disasters, and terrorist attacks anywhere in the world could affect their travelers," BCD Travel noted.
Training employees on best practices for travel safety can help organizations manage any increased risk. Putting in place a risk management travel security policy is also helpful. This company standard should include a plan to support communication with travelers in the event of an emergency, as well as strategies for the business to locate and assist traveling employees should an incident take place.
Analyzing Travel Data
Next year will also see an increased focus on the use of available company travel data. Forbes contributor Laura Parker argued that big data is continually on the rise. In an interview with Sam Turner, sales director at Hotelbeds Group and keynote speaker at the MarketHub Americas 2017 conference, Parker noted that this data can hold considerable potential for companies willing to put in the time and effort to analyze it.
As Turner highlighted, many organizations have more data than they know what to do with. However, pinpointing relevant information and ensuring that this data is accurate, measurable, and sufficient for analysis can help businesses identify important travel insights. These analysis results can then be applied to traveling planning efforts, including to keep companies' budgets in line while supporting employee and client needs.
"Looking to the future, the companies [that] will be able to drive real insights that create real added economic value will place a significant gap between themselves and their competitors," Turner told Parker.
Leveraging Mobile Expense Management
Corporate travelers are increasingly demanding capabilities that make certain mission-critical processes easier from the road. As travelers continue to rely on their mobile devices while operating outside of the office, it only makes sense for businesses to offer robust features on these platforms.
Expense management will always be a top priority for corporate travel, and this is sure to continue into 2018. Now, however, legacy expense management strategies like spreadsheets simply won't cut it, and employees must have ways to track and report their spending from the road.
This is where a mobile expense management solution becomes a critical element to support employee travel. Such technology enables workers to leverage their mobile device to capture receipts and seamlessly track spending during their trip. In addition, expense report approvers can easily review reports for expense policy violations and more quickly approve them for faster reimbursement.
Mobile expense management will be critical next year, ensuring companies can eliminate unnecessary complexity and provide better support for employees. To find out more about how an advanced expense reporting solution can benefit your company, contact Nexonia today for a demonstration.Business Travel Trends to Look Out for in 2018 Gallery
Next year is sure to shift the processes and strategies organizations in every industry use to govern their corporate travel. Here are a few trends to look out for as we head into 2018.
Study abroad programs offered by colleges and universities across the globe can be incredible experiences for students and can provide educators with considerable career development opportunities. In fact, more students are taking part in study abroad than ever before - with a 10 percent increase seen annually, the number of international students is on track to reach 8 million by 2025.
When it comes to studying abroad, one of the first considerations to make is the cost. Whether students are awarded financial assistance or teachers support their travel with fundraising, it's important to track and organize expenses incurred during the trip. Here are a few key benefits that an expense reporting solution can bring for students as well as professional educators:
1) Maintaining a Budget
When students travel abroad, it's incredibly important to establish a spending budget and stick with it. For many students, this means not only accounting for things like food, lodging, and spending on events or supplies, but also calculating according to the local exchange rate. Any mistakes in these calculations can be disastrous for someone traveling outside of the country - imagine running out of currency in a far-away location with few resources at your fingertips.
An expense reporting solution can be incredibly helpful here. Many universities, like Yale, recommend that students keep track of their spending and save their receipts to make sure they are staying on budget. This process can be complicated with paper transaction records and messy spreadsheets, though. Instead, traveling students and educators can use a mobile-friendly reporting solution to organize their expenses and make sure nothing is unaccounted for. Such technology frees travelers from having to hang on to paper receipts and provides more visibility and automatic organization than a simple spreadsheet.
2) Potential Tax Deductions
Financial firm Sapling noted that certain travel expenses - including those related to study abroad or professional travel for continued education - can be tax deductible.
"Unfortunately, students traveling abroad for educational purposes can't typically deduct the cost of travel," Sapling noted. "However, the students can still deduct other costs - like tuition, fees, books and supplies - incurred in a study abroad educational program."
In addition, travel by educators for the purpose of continuing their education or maintaining job status can be deducted as well, if the employer does not reimburse these costs. In this way, whether someone is a student studying outside of the U.S. or an educator attending classes or professional certifications away from their employer, it's important to track spending for tax purposes. This makes an expense reporting solution incredibly important for student and professional travelers, providing them with a simple solution to record and organize spending. Best of all, at tax time, all of the necessary information is easily accessible.
3) Demonstrating Use of Funding
Sometimes tracking spending isn't about reimbursement or tax deductions, but simply about showing where and how money was used. This is true for students who receive financial assistance through family members, scholarships or other programs, as well as for educators who fundraise to support their travel.
An expense reporting solution offers a streamlined way for students and teachers to demonstrate how they used their funding and prove that the money raised or provided was put to good use.
To find out more about how an expense reporting solution can benefit students and educators traveling abroad, contact Nexonia today.3 Benefits an Expense Reporting Solution Can Bring for Study Abroad Programs Gallery
Here are a few key benefits that an expense reporting solution can bring for students as well as professional educators.
Tracking and accounting for spend is critical for any type of organization, but it's especially important when the group is a nonprofit. There are several critical rules that these groups must follow in order to achieve and maintain their nonprofit status, and when it comes to employee or volunteer spending, one of the most essential guidelines to keep in mind has to do with the organization's accountable plan.
What Is an Accountable Plan?
In short, an accountable plan helps a nonprofit track and organize spending related to the group's activities or other outreach. Transactions completed by organization directors, other employees, or volunteers must meet the requirements of the nonprofit's accountable plan to prevent the group from having to pay taxes on these expenses and enable individuals to qualify for reimbursement.
What's Included in an Accountable Plan?
According to financial firm Raffa, accountable plans should include several requirements:
- Expenses must have been incurred to support the organization and its ability to provide services or outreach.
- Any costs paid for by a member of the organization must be reported to organizational leaders within a reasonable period of time.
- Reimbursement must also take place within a reasonable time period.
These requirements help ensure that spending is accurately tracked, that workers or volunteers are reimbursed quickly where appropriate, and that records can show that expenses are tied to the organization and its mission.
Why Use an Accountable Plan?
Expense reporting and the associated reimbursements that take place according to the requirements of an accountable plan allow nonprofit leaders and volunteers to exclude these sums from taxable income. As legal firm Nolo pointed out, not only are these expenses tax-free, but they don't have to be reported to the IRS so long as they are incurred for the purpose of the organization and can be accounted for correctly.
An accountable plan doesn't just bolster expense tracking and reporting for nonprofits - it can also help eliminate fraudulent activity.
"These strict rules are imposed to prevent directors and employees from seeking reimbursement for personal expenses (or nonexistent phony expenses) under the guise that they were work expenses," Nolo noted. "An accountable plan doesn't need to be in writing (although it's not a bad idea). All your nonprofit has to do is set up procedures for your employees to follow that meet the requirements."
Best Practices for Your Accountable Plan
As Nolo recommended, it's good to record your nonprofit's accountable plan, including its requirements for tracking and reporting spending. This ensures that everyone who incurs expenses associated with nonprofit activities is on the same page and understands what their responsibilities are according to IRS standards for taxable income.
It's also important to keep the plan's time periods in mind. Expenses should be reported within 60 days of the transaction, and any money exceeding the cost of the expenses should be returned in less than 120 days, Nolo stated.
In order to meet these deadlines, employees and volunteers need a streamlined way to track and report their spending, and organization directors must be able to quickly approve reports and support fast reimbursement. An advanced yet simple-to-use expense reporting solution can provide the capabilities today's nonprofits need to align spending with their accountable plan and ensure quick and accurate reimbursement.
To find out more about how an expense reporting solution can benefit your nonprofit's accountable plan, contact us for a demonstration of Nexonia Expenses today.How an Accountable Plan Impacts Nonprofit Expense Reporting Gallery
When it comes to nonprofit spending, one of the most essential guidelines to keep in mind has to do with the organization’s accountable plan.
Your nonprofit organization's mission often requires fundraising and spending on the part of your volunteers. Your group must have an easy way to account for expenses and make necessary reimbursements.
But what's actually required when it comes to nonprofit expense reporting, and what best practices should your organization leverage to improve this process? Let's take a look:
Reimbursement through an Accountable Plan
As nonprofit knowledge network Mission Box explained, your organization can leverage an accountable plan for expense reimbursement. Such a plan not only shields the group from having to report payments or pay taxes on them, but also prevents the reimbursed volunteer from having to include these monies in his or her taxable income.
In order to qualify as an accountable plan under Internal Revenue Service standards, the policy must only encompass spending related to the nonprofit. Volunteers must report spending within 60 days of it taking place. It's also their responsibility to return any extra funds within 120 days of the expense. These rules prevent reimbursements from having to be taxed and also protect the nonprofit against fraudulent reimbursement of personal expenses.
When expenses are reported as part of a nonprofit accountable plan, the following information should be included:
- The name of the individual who incurred the expense and requires reimbursement.
- The type of goods or services that were purchased, as well as the original receipt or service invoice.
- The date on which spending took place.
- The purpose of the expense, as it relates to the nonprofit.
With this information in hand, report approvers can ensure that expenses are recorded and organized according to the accountable plan, that reimbursements will not be taxed, and that approval and repayment can take place as quickly as possible.
In addition to outlining and organizing details about spending to support fast reimbursement, your nonprofit should also look to break down its expenses into different categories. This ensures that employees and managers have the most visibility possible over the organization's spending, and your group can account for how donations and other capital were used.
Accounting and consulting firm McKonly & Asbury explained that nonprofit spending categories can include:
- Program service expenses, including necessary spending that takes place in order to support the organization's stated mission.
- Fundraising, such as costs required to host a solicitation event.
- Management and general expenses, or costs tied to administrative activities like bookkeeping and day-to-day governance.
Leveraging Technology Alongside an Accountable Plan
While an accountable plan isn't a requirement for nonprofit expense reporting, the alternative typically involves repaying volunteers using a fixed allowance or stipend, resulting in individuals having to report and pay taxes on this income. As a result, many nonprofits are utilizing accountable plans to support better organization and visibility into group expenses.
One of the easiest ways to streamline your nonprofit's spending and reimbursement is to leverage an advanced expense reporting solution that automatically captures and provides all the information managers need to quickly approve reports and disburse repayment. Volunteers can easily complete reports from their mobile device, and your organization's leaders can access and approve reports in a much more streamlined manner.
To find out more about enhancing your nonprofit's expense reporting processes, contact us for a demonstration of our industry-leading expense reporting solution today.Nonprofits: What's Required to Report Your Volunteers' Expenses? Gallery
Your nonprofit can use an accountable plan for expense reporting, but what does such a policy entail?
Religious organization leaders have a lot on their minds, including the best ways to use their resources to help and support the local community. Church-sponsored activities like mission trips, fundraising, and summer camps can be beneficial for a religious organization, its members, and local citizens, but these events also come with related costs. Tracking and managing the financial resources of a religious organization is different from managing the expenses of a business. Organizational leaders must keep several considerations in mind while ensuring they are following the latest rules for nonprofit spending. Thankfully, there are a few things religious organization leaders can do to streamline this process, including:
Creating Spending ThresholdsWhen a church or other type of religious organization sponsors an event or other outreach, they must ensure spending is allocated according to the level of financial resources the group has available. If too much is spent on a camp or mission trip, for example, the organization may not have the funds to participate in other planned events. Although approving expenses in advance can work for some organizations, it can also become a time-consuming and arduous process for organizational leaders. Instead, it could be helpful to create a budget and specific spending threshold for each event or activity. In this way, organizational members can obtain the supplies and items they need, and church leaders need not worry about dealing with reimbursement forms or approving expenses ahead of time.
Working With Preferred VendorsBecause it's usually not feasible for organizational leaders to be involved in every transaction necessary to support the religious group, it can also be beneficial to create a list of approved merchants. In this way, members who have the ability to spend on behalf of the organization know exactly where to turn when they need supplies or other items. As Church Tech Today contributor Lauren Hunter pointed out, many churches likely already have trusted merchants they do business with on a regular basis. "Include a list of these vendors in your accounting policy, and consider requiring employees and volunteers to use them unless they've received approval to shop elsewhere," Hunter wrote. "You're free from micromanaging every purchase and can focus on your church."
Tracking Spending with a Mobile-Friendly Reporting SolutionIt's imperative that organizational leaders account for every dollar donated to the group. This isn't just important for the group's overall transparency, but as accounting firm HCVT pointed out, new guidance from the Financial Accounting Standards Board now requires more visibility for nonprofit expense reporting. These standards, which will make it easier for donors, creditors, and other financial institutions to assess a nonprofit's resources, will go into effect on Dec. 15, 2017, and religious organizations must be prepared. In order to support the type of transparency needed, religious groups must track their spending. As opposed to hanging onto physical receipts, which can easily be misplaced, a better solution is to utilize expense reporting software that comes with mobile capabilities. In this way, members and church leaders can simply snap a photo of their receipt at the time of the transaction, ensuring that every dollar is accounted for. What's more, mobile support enables organization leaders to approve expense reports from anywhere, streamlining reimbursement where necessary. A leading expense-reporting solution, like Nexonia, also provides credit card integration, eliminating the need to manually match transactions with expense reports. A solution that supports multiple currencies is ideal for today's religious organizations, especially those that take part in mission trips outside of the US. To find out more about how an advanced expense reporting solution can streamline the expenses of your religious organization, contact Nexonia today for a demonstration.How Religious Organizations Can Streamline Their Expenses Gallery
Tracking and managing the financial resources of a religious organization is different from managing the expenses of a business.
Religious organizations have been taking more frequent mission trips lately, both inside and outside of the U.S. According to Short Term Missions, the movement toward this kind of outreach began in the 1960s, and today, more than 2 million people in America participate in church-sponsored trips.
Mission trips can create specific challenges for both volunteers and church leaders, especially when it comes to necessary spending. Expenses must be tracked and recorded, and volunteers must be reimbursed where possible. Doing all of this by hand isn't just time consuming and arduous, but can create more opportunity for error.
A better alternative is an expense reporting solution that can help the church better organize its finances and mission trip expenses. Let's take a look at why this kind of technology is ideal for today's churches:
1) Better Tracking and Visibility for Receipts
As ChurchLaw&Tax pointed out, it's important that mission trip leaders keep a detailed recording of all expenses that take place during a mission trip, and obtain receipts where possible. This log should also include information like the date expenses took place, the names of volunteers spending the funds, how much was spent, and the purpose of each expenditure.
Organizing all of this information alongside the necessary receipts can be a challenge, especially when church members are away from their normal workspace. In these situations, few things are better than being able to complete all of this work from the palm of your hand via a mobile device. Now, more religious organizations are leveraging technology than ever before, and using an expense reporting solution that enables users to easily capture receipts and track all of the particulars of their spending significantly streamlines expense management. At the same time, this solution also provides access to important spending data for church leaders, providing the visibility they need to properly organize church finances.
2) Account for All Donations
Tracking expenses during mission trips is important for a number of reasons, and near the top of this list is the fact that money garnered from donations must be accounted for. Churches and religious organizations are tax exempt, but they must keep meticulous records of how donations were used in order to qualify for this status. This is particularly true during mission trips.
As ChurchTax&Law noted, any spending of donations that cannot be accounted for must be returned to the church after the trip. Putting in place an advanced expense reporting solution can help ensure that all expenses - particularly those funded by donations - is tracked and accounted for, helping churches align their practices with their tax exempt responsibilities.
3) Streamline Exchange Rate Calculations
One consideration that is often overlooked during mission trips is the daily exchange rate that could impact expense tracking and reimbursement. Short Term Missions found that 65 percent of all mission trips take place overseas, and most regions use their own currency.
Thankfully, an industry-leading expense solution can take the guesswork out of exchange rate calculations. Using daily exchange rates according to the date of the expense receipt, exchange rates can be automatically and accurately calculated. This means your church's reports are consistently correct, and spending is always tracked in the most precise way.
Church mission trips require a number of important considerations, and while tracking spending is imperative, it can fall to the wayside during the trip, creating complications after the journey has ended. These problems can be eliminated with an advanced expense solution that allows mission trip participants to easily track spending, organize receipts, and account for the donations used to support their work.
To find out more, contact the experts at Nexonia today.3 Reasons an Expense Reporting Solution Is Ideal for Mission Trips Gallery
Mission trips can find additional support with expense reporting solutions.
If you run a business, chances are good that you've had to send your employees on a trip - or take one yourself - for a corporate initiative. Whether the purpose of the trip is to scout a new location, visit a client or cement a partnership with a new B2B vendor, it's important that traveling workers have what they need to make their journeys successful.
According to current statistics, business travel is more common than many realize - in the U.S. alone, employees take 488 million business trips each year, including 12 trips a year for older travelers, and 14 trips a year for younger employees.
With so much corporate travel taking place, it's imperative that your company's traveling workers are supported with the right tools and strategies. What do your traveling employees need? Let's take a look:
1) A Clearly Understandable Travel Policy
There's nothing worse for a staff member than to be asked to take a trip for the organization without having a robust understanding of the business's travel policy. This policy must outline what is expected of employees, as well as what's expected of the company, especially when it comes to paying for travel costs and reimbursement.
According to a report from the Global Business Travel Association, 79 percent of traveling employees noted that their organization's travel policy has the largest impact on booking decisions. In fact, this policy has become even more critical than overall convenience and the price of the trip.
Because this policy is so crucial for workers and the decisions they make surrounding their travel, it's critical that the policy is well defined and easy to understand. This will ensure that employees are completely clear about corporate travel guidelines, reimbursement and other important factors that contribute to their plans.
"The study results show that travelers want to do the right thing," said Tobias Ragge, CEO of the hotel giant HRS. "Communicating the travel policy through the right channels at the right time and listening to your travelers' feedback is key."
2) Continual Communication
Communication isn't just important where the travel policy is concerned. It's also essential that traveling employees remain in the loop with their managers and other co-workers, even when operating outside of the office. This not only ensures that workers have the support they need during their trip, but can also contribute to higher productivity and job satisfaction.
According to research from Office Vibe, the vast majority of staff members - 65 percent - crave more feedback about their work. And because 69 percent of employees work harder when their efforts are recognized, and 78 percent noted that this recognition contributes to being more motivated on the job overall, it's important that managers don't let communication lapse during a business trip.
"Feedback and engagement becomes especially important for team members who are less visible or interact with colleagues infrequently because of remote working," Forbes contributor Kavi Guppta wrote.
3) An Easy-to-Use Expense Reporting Solution
One of the most complex factors of business travel surrounds the process of keeping track and reporting expenses. A clear travel policy providing guidelines here can help, but one of the best ways to support traveling employees in this pursuit is with a streamlined expense reporting solution.
It's important for decision-makers to seek out an expense management software that can:
- Integrate with accounting and ERP systems, making it easier to sync and utilize data across these important internal platforms.
- Support multiple different currencies, particularly if employees make frequent trips out of the country.
- Be accessed via mobile devices, enabling employees to more easily track and report expenses on the go.
An expense management solution of this caliber can considerably streamline the approval process and reimbursement for employees, while making it easy for executives to glean the visibility they need into their company's travel costs. To find out more, contact the experts at Nexonia today.How to Best Support Your Traveling Workers Gallery
Companies can support their workers by taking these three steps.
There's no doubt that education comes with its own set of expenses. And while the back-to-school season sees parents grumbling about the ever-increasing list of supplies they must buy, many overlook the fact that educators also spend their own money to support classroom lesson plans.
Estimates vary, but Bankrate reported that teachers typically spend $530 out of pocket for school supplies. TurboTax noted that educators spend $945 on average and that this is a common practice before the school year starts for 99.5 percent of all teachers in public schools.
Thankfully, there is some reimbursement at play here — some schools with larger budgets pay educators back for their expense. In addition, the IRS also offers a tax deduction of up to $250 for educational expenses.
In order to get this reimbursement, though, teachers must track their spending. But what expenses are the most important to record?
This can be one of the largest expenses teachers have to deal with by far. While many districts with shrinking budgets are offsetting costs by adding items like tissues and wet wipes to parent school supply lists, as Time contributor Martha White noted, the costs of many supplies fall to educators. Whether teachers buy special supplies for specific lesson plans or simply to ensure that all students have the tools they need, it's important to track these expenses.
The IRS noted that unreimbursed expenses related to classroom supplies like books, computer equipment, and software are eligible for deduction. Keeping track of these transactions will make it much easier for teachers to get this reimbursement come tax time.
P.E. Teachers: Athletic Equipment
Reimbursement doesn't just come for typical classroom teachers — those in charge of physical education classes can also get reimbursement for their expenses. In this way, P.E. teachers who spend their own money on nets, balls, or other fitness equipment should keep track of their spending as well. While larger purchases may be funded or reimbursed by the district, any leftover, unreimbursed spending can be deducted on yearly tax forms.
Professional Development Programs
Many educators head back to school to further their own skills and knowledge, and as Bankrate pointed out, these expenses can be written off at tax time. Some districts will also offer financial support for teachers who expand their own education, so it's important to track expenses related to professional development programs, including any necessary travel costs.
Make Expense Tracking Easy
Whether for reimbursement from the district, for tax deductions, or simply for their own personal records, it's beneficial for teachers to keep track of the expenses they incur. TurboTax recommends keeping detailed records, and while keeping receipts in physical files is an option, a better way is with an expense reporting solution.
This technology allows educators to easily take photos and keep digital copies of receipts alongside details about their expenses. Everything is organized and easily accessible when it comes time to report to the district for reimbursement, or write things off at tax time.
To find out more about using an advanced expense reporting solution to track educational spending, contact us for a demonstration today.What Types of Expenses Should Teachers Track? Gallery
There’s no doubt that education comes with its own set of expenses.
Reporting expenses is an important job in every line of work, but for nonprofits, tracking every type of spending that takes place for the good of the organization is imperative. Ensuring nothing goes to waste is essential, but nonprofits also have specific industry rules that they must follow, and these impact expense tracking and reporting in particular.
IRS Form 990
Tax time is a little different for nonprofits, specifically those tax-exempt groups and any organization that is a private foundation. These groups must file Form 990 with the Internal Revenue Service each year by the 15th day of the 5th month of the organization's fiscal year, according to the IRS.
Form 990 is a little different from the tax forms used by for-profit companies and non-charitable institutions. Unlike corporate IRS forms, the 990 is used by the IRS as well as other groups and interested parties - this form compiles details about the nonprofit's mission, the programs it supports, and its overall finances, and is publicly accessible.
"Because the data are readily available, most donors, funders, and charity watch-dog agencies calculate program-spending and fundraising-efficiency ratios using Form 990 data," In Focus authors noted in a CPA Journal report, "Functional Expense Reporting for Nonprofits."
Accuracy Is Paramount
Because Form 990 is a public-facing document, nonprofits must verify that their expenses are in order, and are categorized according to the form's specific delineations. Expenses must be separated into three different umbrellas, including program expenses, administrative expenses, and fundraising expenses.
While there are no hard-and-fast rules about how a nonprofit's budget should be spent, Form 990 helps show how the organization's donations and other capital are used. In this way, accurate bookkeeping and expense reporting is absolutely critical.
The Growing Issue of Problematic Calculations
In Focus noted that in some cases, reporting of expenses within Form 990 isn't error-free. In fact, some nonprofits' calculations simply cannot be accurate, including instances where organizations report zero fundraising costs, or report zero management and general expense costs.
This type of situation can create distrust among potential donors and financial supporters, not to mention issues with the IRS. Nonprofits expense reporting must be done in the most accurate way possible.
Calculating and Categorizing: Where Travel Fits In
A big part of supporting accuracy is correctly categorizing expenses as they relate to the three sections of IRS Form 990. Legal resource provider Nolo noted that things like teaching a class or delivering goods and services to the less fortunate would fall under program expenses. Costs including those connected with board of director meetings, insurance, human resources, or office management would be considered administrative expenses. And things like publicizing an event or supporting a funding campaign would be included in fundraising expenses.
When nonprofit employees or volunteers take part in travel as part of their organization's mission, these expenses must be carefully tracked and reported. Numerous costs can come up, including flights or other transportation, lodging, and food. These expenses should be categorized according to the activity they relate to. For instance, if travel takes place as part of delivery of goods or services, costs should be reported as part of program expenses. Travel to support a special contribution soliciting event, on the other hand, should fall under fundraising expenses.
However nonprofits leverage their travel, the important part is to verify that all expenses are properly tracked, recorded, and accounted for. Accuracy and transparency is critical, especially when it comes to the ways in which nonprofits use their financial resources. One of the best ways to support this is with an advanced expense reporting solution. Such technology can ensure that employees and volunteers have an easy way to track their travel spending, can be easily reimbursed, and can help make certain that no expense goes unreported or otherwise falls through the cracks.
Correct expense reporting is particularly critical for nonprofits, especially as it relates to IRS Form 990. A streamlined expense reporting solution can make all the difference here, providing a transparent way for administrators and staff to manage, calculate, and categorize expenses.
To find out more about how technology can improve your nonprofit organization's accurate and transparent expense tracking, contact Nexonia for a free customized demonstration today.Why Expense Reporting Is Even More Important for Nonprofits Gallery
Expense reporting is a beneficial tool, especially for nonprofit organizations.
For most corporate employees today, business travel has become a way of life. In fact, according to PayStream Advisors 2016 Travel and Expense Management Report, 40 percent of businesses have a workforce that takes part in travel at least one week a year, and another 24 percent of organizations noted their employees traveled for at least four weeks per year.
With so many enterprise-sponsored trips happening, it's important that company leaders and traveling staff members have a simple way to keep track of and report their travel expenses. This is where an automated expense reporting solution comes into play. Such technology can make the lives of travelers and their employers much easier, thanks to a few key benefits. Let's take a look at three top reasons why companies of all sizes are flocking to these solutions:
1) Aligning Expense Practices with Company Travel Policies
Now that the vast majority of organizational workers take part in business trips throughout the year, having a company travel policy has become more commonplace. This policy lays the ground rules for everything from booking travel to reimbursement for expenses, and ensures that traveling workers and their companies remain on the same page.
A travel policy is especially important when it comes to tracking and reporting expenses, as well as paying employees back for the money spent on corporate travel. In the past, it was difficult to align expense reporting practices with the company travel policy - in fact, according to a study from Aberdeen Group, improving compliance with company travel procedures was a pressure faced by 49 percent of organizations.
Thankfully, an automated expense reporting tool can alleviate this challenge. By creating a single solution for inputting receipts and tracking other expenditures, it becomes much easier for workers and employers to remain in step with important policy pieces, like per diem amounts and reporting schedules.
2) Reducing Operating Costs
Travel is expensive, and the cost can increase exponentially for longer trips, or those that require added stops. This can create an increase in the number of expense reports that must be processed every month. PayStream found that half of all companies process at least 500 expense reports on a monthly basis, and another 26 percent process as many as 2,500 reports. And when you consider that it costs an average of $41.12 to process a single report manually, the cost of corporate travel can become significant.
A top priority among business leaders today is to reduce these costs, and there are few better strategies to employ here than utilizing an automated expense reporting solution. CFO Edge found that with this technology in place, the cost of processing a report drops to $7.17, helping companies save an incredible amount of financial resources that can then be put towards more pressing mission-critical initiatives.
3) Streamlining Employee Reimbursement
From an employee perspective, one of the biggest challenges with corporate travel is the time it takes to be reimbursed. Even if the organization pays up-front for airline tickets and hotel stay, the worker is still responsible for day-to-day expenditures like food. And when staff members aren't reimbursed as quickly as possible, it can contribute to reduced job satisfaction.
PayStream discovered that lengthy reimbursement cycles fell within the top five travel and expense management challenges companies face today. An automated solution can help businesses streamline their reimbursement by making it much easier for employees to submit reports on time.
With a robust travel expense management solution, employees can access the platform via their mobile devices and input receipts from anywhere. This means there's less of a chance that a receipt will be lost, and staff members can get their reports in on time, helping to eliminate any delay in reimbursement.
Overall, automated expense management tools are a must for any company with a traveling workforce. To find out more about how this technology can make your life and the lives of your employees easier, contact us today.3 Ways Automated Expense Reporting Makes Your Life Easier Gallery
Automated expense reporting offers many benefits.