Our Expense Recognition Policy is an essential tool for organizations aiming to refine their expense management and accounting practices. Designed to promote accuracy and compliance, this resource provides actionable insights that help businesses maintain transparency in financial reporting and optimize internal processes. By adopting the strategies outlined in this policy, organizations can effectively mitigate errors, ensure timely recognition of expenses and uphold the integrity of their financial data.

This document includes two samples, each addressing key aspects of expense recognition. Sample 1 introduces fundamental concepts such as the accrual basis of accounting, emphasizing the proper timing of expense recognition and the importance of thorough documentation, including purchase orders and invoices. It also explains the three-way matching process and protocols for handling exceptions. Sample 2 expands on these principles by detailing procedures for recording payments, managing accrued expenses, and ensuring compliance with payment terms. Together, these samples offer a structured approach to mastering expense recognition and maintaining robust financial controls.

Sample procedures include:

• Transactions less than $X should be paid utilizing the purchaser’s department procurement card.
• All marketing invoices must have a receipt attached.
• The voucher package should be coded with the appropriate general ledger accounts and vendor number.
• The recorded value should be based on the best available estimates when actual values are not available.