How Can We Streamline Advance Payments for Employees on Out-of-Station Audits?

Dear All,

I am working in a CA firm. Here, we have a system of paying advances to employees for conducting out-of-station audits, conveyance, lodging, and food expenses, etc. When employees go for an out-of-station audit, they need to fill out a form and obtain approval from their immediate supervisor. After that, they submit the form to the Admin department, and upon necessary checks, it is forwarded to the accounts department for transferring the sanctioned amount to the employee's account.

However, most of the time, employees are already on audit for the next assignment when they need an advance. This situation makes it challenging for them to come to the office, fill out the form, and get the necessary approval. Often, they communicate via phone, and we end up sanctioning the advance without valid paper proof. The formalities are completed only upon their return, leading to a time-consuming and inefficient process with pending work.

Could anyone suggest what to do in this case? I want to improve the process and make it more effective. Please suggest.

Thank you.

It is always better to ask company auditors what system should be adopted to ensure misuse, fraud, or a counterchecking mechanism. Auditors themselves are true professionals to advise because they find faults in systems and compliances where they are engaged to audit the accounts of your clients.

Regards,
Bhajiya

Thank you for your response Bhajiya.

As I thought and discussed one idea with my boss is: it can be online. Employees can receive soft copies of the form, fill it out, and send it to the HR department. The HR department can then forward it to their immediate supervisor for approval. Do you think this approach will be effective?

Dear Ms. Swati,

In the said case, I want to know the following questions:
- In what way do they take money without approval if they do not come to the office?
- To whom do they seek approval from?
- Do all auditors receive laptops or not?

Please reply immediately so I can easily resolve your query. One step I suggest is as follows:
1. It would be better to decide on the manpower, travel, and audit location at least one month in advance. This way, lodging, boarding, and food expenses can be paid based on these decisions.

Dear Swati,

As a process, the concerned auditor's manager should send an intimation regarding the number of days/dates of travel and destination details to the HR department and admin department. The manager can request the admin department to make travel arrangements as per the domestic travel policy in force.

The admin department then makes travel arrangements such as hotel bookings and transport arrangements and submits a statement of approximate expenses (hotel, transport, food, etc.) report to finance. Based on this, the advance can be released. Upon returning from travel, the auditor/employee should submit all original bills to the finance department.

In case travel days are extended, or if the domestic policy does not exist, or if travel arrangements are made directly by the auditor, then the auditor should send an email to finance, HR, and their manager requesting for an advance to be remitted to their account. The email should include a breakdown of expenses (hotel, tax, food, etc.), and this request should be honored.

You can ensure the weekly submission of an expense sheet while on the client site to avoid any confusion or if you suspect funds are being misused. However, original bills are a must for settling accounts, and do ask for the boarding pass if a flight journey is undertaken.

Have a good day,

Lakshmi.

Dear Swati,

Online is the best solution. I am working in a software company where employees go out for on-site support such as implementation, system support, client support, etc. Consequently, the planned days will exceed.

We have a system called the on-site allowance system in which they can claim their allowance and attach their bills. This helps in saving time as well as being a paperless process.

In the system, employees can enter their allowance, then one person can verify it, and another person can approve it. Once the report is sent to the accounts department, the amount is credited to their salary accounts.

You can contact me if you need a look at the system, and I can assist you.

Regards,
Sathishkumar

Hi Swati!

I am not able to understand: if they move on to the next audit or location without coming back to the office, how do they get the advance? And now, if the auditors are in good positions/salaried, how much money do they expend? Why is it not possible to do so without an advance? In such cases, ATMs are everywhere; they can spend their own money and claim it when they come back.

The decision to be made is to think about the root cause of the problem where it arises. This is how I think; maybe I am wrong.

Regards,

Gaurav Arora

Dear Swati,

I would suggest that you should streamline the procedure to make it easier for the employees. Instead of an advance, I recommend providing an imprest fund that you believe would be sufficient for 1 or 2 months, with a proposed amount of Rs. 30,000.

Reimbursement should be based on the submitted invoice, but employees should always maintain an imprest of Rs. 30,000, not more than that.

If employees feel they need a higher imprest, it should be reviewed and based on the previous month's expenses.

The company should be flexible on this issue.

Saji

Hey Swati,

I believe the auditors are dedicated to serving specific clients only. Therefore, even if their visits are continuous from one client to another, it must be preplanned (assuming auditors are not generating their own clientele on the go). Through proper planning and forecasting, a lump sum can be credited to auditors' accounts, and the same could be verified upon their return.

Regards,
Devashish.

Your organization may not be reliable as people want advance salary before maturity. Salary advances are a poor practice. When salaries are low, employees tend to develop tendencies of asking for advances. It is essential to set restrictions and offer competitive salaries.

Partho

Dear Swati,

As I see it, it is just the opposite of what you think. Rules are made to be followed, but in certain circumstances, there may be some flexibility if it hampers the work. For example, if an auditor returns to the office to complete all formalities before moving on to the next audit, do you have any idea how much time and money is wasted in all of this? In my opinion, your system is acceptable; if there is time, employees can fill out the necessary forms and complete other formalities before beginning an assignment. However, if time is limited, the formalities can be completed later, as long as it does not disrupt the workflow.

Thank you.

Here is the corrected text with proper spelling, grammar, punctuation, and paragraph formatting:

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Have the approval online as suggested in earlier posts.

Have a separate account opened for "Advances/Reimbursements" and keep depositing all advances/settlements in the same so that future tracking would be easy at any time.

Circulate Employee ledger on such advances/expenses; once every three months, take acceptance from them.

Bye,
Nivas ;-)

Dear Swatiji,

We thank you for your kindness in addressing this topic. It seems you have placed too much importance on this systemic issue, which may not be as crucial, as such problems are unique and typical to your type of organization. Thankfully, at least you are not competing with Bhajiya Post.

Rashid