- take the cost reimbursement system of company y, for example
Peaks
As a mirror, corporate cost reimbursement can mirror all aspects of corporate governance: the signature process and the level of authority, reflecting the level of internal control within the company; invoice audit and expense attribution, reflecting the company's tax and risk awareness; private use of public funds, waste of corruption, and screening of the integrity of superiors; and the movement of costs against the company's performance. Company y is a supply chain service provider with a complete system of reimbursement. This paper presents, for example, the cost reimbursement system for company y, the establishment of the enterprise cost reimbursement system, process management and risk control strategies。
I. Institutionalization of enterprise cost reimbursement
(i) principles for the construction of the reimbursement system
The first is adherence to the principles of necessity, reasonableness, compliance and economy. Every cent of the enterprise's money is spent on the blade and maximizes its value through the establishment of regulations, cost reimbursement rates and a system of cost reimbursement。
Second, it adheres to the principles of strict control over reimbursement processes. In accordance with the requirements of first-instance expenditure, approval of authority, non-relationship of advance amounts and the requirement that annexes to reimbursement documents be complete, procedures for reimbursement of costs are regulated, controls and controls are strictly enforced to prevent and eliminate corruption and waste。
Third is the principle of classification management. Reimbursements are divided into travel and operational hospitality and are managed separately。
Fourth is the principle of strict accountability. (c) to establish a system of accountability for the reimbursement of expenses and the payment of monetary funds, “who approves and is responsible”. The appellant and the approving officer are responsible for the monetary funds that are subject to their own audit and approval, in order to prevent the risk of currency funds and to ensure the security of the company's funds. The appropriate examiners and examiners are liable for negligence and are jointly and severally responsible for the adverse consequences of the violations。
(ii) framework for the cost reimbursement management system
1. Establish reimbursement rates. Travel costs are based on the level of staff and the location of the mission to establish standards for transportation, accommodation and catering, respectively. Exceeding the standard is subject to approval by the receiving officer's superior, otherwise the excess is not reimbursed。
2. Regularize the reimbursement process. Reimbursing business hospitality will require the completion of a “business hospitality application form” detailing the time, location, personnel, etc., and will be reviewed by the finance staff upon signature by the head and the responsible person。
3. Establishment of a centrally administered reimbursement system. In the case of company hospitality, which in principle is subject to uniform fee-setting and settlement by the executive branch of the company, prior requests for hospitality by the department in connection with its duties require approval by the head of the company。
4. Establishment of a prior audit system. If a staff member is required to submit a travel request prior to reimbursement of travel expenses and to submit it to his or her superiors and personnel for approval, the travel date on the travel request shall correspond to the date on which the invoice was issued during the mission。
Strengthening accountability systems. No reimbursement shall be made for false or irregular violations, and, in the case of those who have already been reimbursed, the reimbursement shall be subject to a fine of between 5 and 10 times the amount of the violation, which shall be dismissed and further processed in serious cases. A fine of 10 per cent - 50 per cent - is imposed on the examiner and the approver if they have been awarded reimbursement under the signature of the examiner, the examiner if the information is incomplete, the original documents are inadequate and the project is not genuine。
6. Establishment of a reserve management system. Borrowings for staff on official business or for other reasons should be duly carefully completed and approved by the head of department and finance-related personnel, and the borrower is required to settle the loan with the treasury within seven working days of the completion of his official duties, with no prior payment being processed. By 31 december of each year, all individuals, except those borrowed in late december, had to be paid back their reserves, which were overdue and deducted from their personal salaries once or in part. If an employee borrows on account of his or her official needs, the loan generally does not exceed half a month's salary, beyond which other employee guarantees of the company are required, the guarantor is not specifically identified, the head of the department on the cash loan list is the guarantor, and if the borrower does not repay the loan, the guarantor bears the joint and several liability for repayment. In principle, a staff member on a probationary period cannot borrow, and the supervisor is responsible for securing the loan. Where large purchases require borrowing to make advances, annexes to the relevant contracts are required and cannot be borrowed into personal accounts, and public payments are generally required。
Ii. Process management of reimbursement
Improved cost reimbursement processes are essential to effectively manage and control expenditure. So, who exactly does staff need to sign for reimbursement? Generally, the signature role of the department manager is to prove that the business is valid, that the ministry of finance is signing for the purpose of reviewing the invoices and amounts, the approved budget, that the superintendent of finance is signing for the purpose of knowing the movement of funds, and that the deputy general or general manager is signing for the approval of the expenditure of funds. Along these lines, company y requires the signature of the department manager, the finance department, the finance director and the director-in-charge, as well as the general manager, if the company does not have a contribution budget. This is done as follows。
(i) clear delegation of authority and control responsibilities. In particular, the first is to develop and improve the approval process to clarify the scope and scope of the operation of the various posts and the corresponding responsibilities; the second is to prepare guidelines on the competence of the regular delegation of authority, setting out the scope and authority of the special delegation of authority and strictly controlling and supervising the special delegation of authority; the third is to regulate the exercise of the functions and responsibilities of managers at all levels of the enterprise within the scope of the delegated authority; and the fourth is to make collective decisions on important matters or to introduce a system of signing. For example, in the case of company y, where the cost was over-budgeted, the company increased the approval of the budget manager and the finance director, and the larger amount required written confirmation from the general manager and the finance director。
(ii) establishment of a separate and mutually supervised system for the administration of claims. The company provides for the separation of responsibility for the reimbursement of operators, auditors, the execution of payments, audit inspections, etc., and that the reporting, review, payment and ex post audit aspects must not be carried out by the same person, and that no officer at any level of business has the right to audit his/her own expenses, including the company's senior management, in order to prevent internal fraud。
(iii) optimizing processes, developing software and improving cost recovery efficiency. In the past, owing to the complexity of the reimbursement system, staff members were often vulnerable to errors in the claims process, resulting in inefficient approvals at a later stage. In order to address this problem, company y established a research and development team, making full use of it technology, established a humanized reimbursement system and achieved automatic processing of claims, thereby reducing the rate of error in reimbursement and improving efficiency。
Iii. Management of reimbursement and risk management
In its work, company y strengthens the management and risk control of the reimbursement of costs by taking the following management and control measures。
(i) strengthening budget management. In the case of occasional costs, classification by level of usage and use, criteria are established on the basis of grade; the costs of long-term use of staff are budgeted in conjunction with detailed use plans. The plan and budget must be as detailed and comprehensive as possible and the finance staff should review the reasonableness and reliability of the plan and budget lines. Plans and budgets should be prepared in a manner that is fully democratic, open and discussed in due course, in order to fully accommodate staff proposals. The plan is precise enough to facilitate its implementation. In the implementation of the plan, the authorities are required to make reasonable adjustments to the actual situation. According to the plan, the heads of the respective departments are evaluated on a monthly basis and linked to their performance. At the cost reimbursement processing stage, priority will be given to the reimbursement of expenses that fall within the scope of budget management, and more stringent approval will be required for costs that exceed the budget。
(ii) integration of cost management into the cost assessment system. In order to have overall control over the reimbursement of the costs of the enterprise, the overall cost indicators are broken down into functional units, which in turn are divided into functional groups, functional staff, and form a system of decomposition of the indicators “lower insulation, one layer, one layer, one layer, one layer”, actively pursuing internal potential to synchronize the cost and cost assessment with the purpose of effectively controlling costs and costs。
(iii) serious discipline against false reporting. Firstly, it is responsible for managing senior managers ' functional consumption, with a focus on preventing them from making false statements of their official consumption on hospitality, meetings, training, travel, office supplies, etc., and strictly regulating abuse of authority, as well as providing full-time oversight through the disclosure of executive fees. Second, it is to strengthen the scrutiny of cases of misrepresentation, overstepping of standards, such as the use by employees of private fuel, meals, etc. In their claims to finance their own business, which will not allow claims to be made in lieu of other reasonable instruments, beyond the budget or the prescribed standards, even virtual non-existent operations, the purchase of false invoices, etc。
In order to prevent false or false statements, the finance staff would have to strengthen the audit of the original documents. In the case of the reimbursement of accommodation, the finance staff check whether the hotel accommodation costs match the time on the travel request, and whether the water bills issued by the hotel are provided; whether the airfares are supported by travel and travel requests; when the overtime taxis are reimbursed, check that the time should be the same as in the overtime forms provided; when the expense is reimbursed, check whether the time on the bank bill is the same as on the invoice; and when the office supplies are reimbursed, check for the availability of the goods and the entry documents, etc. An audit of the details of the original documents to verify the authenticity of the business would eliminate the existence of fraudulent claims。
(iv) strict control of payment chain. Strict inspection and control of payment chains ensure both the quality of accounting and the avoidance of reckless errors, as well as the prevention of the commission of criminal acts by cashiers。
(v) strengthening ex post controls and analysis. Establish a system of cost monitoring and analysis, clean up other receivables on a monthly basis in a timely manner, analyse the summary of reimbursement costs, report monthly cost completion and evaluation results to corporate leadership, and identify problems and close gaps in a timely manner。
(vi) enhanced risk control. There are a number of potential tax-related risks in reimbursement of costs, such as: poor review of invoices, resulting in the recording of false and invalid tickets; the treatment of remuneration-type expenses as travel expenses, resulting in the underpayment of personal income tax; the inclusion of costs that cannot be fully deducted before tax, such as travel expenses, resulting in the underpayment of corporate income tax; and the use of gifts as reimbursement for expenses, such as the purchase of gifts for customer maintenance. In order to reduce the tax-related risks, there is a need for consistency in the reimbursement of costs, i. E. Accounting entries, vouchers, approval documents and invoices. Financial staff are required to exercise strict control and scrutiny in the review of costs and avoid charging staff remuneration expenses and staff benefits。
In short, the effectiveness of management and control of enterprise cost reimbursement is fundamental, and effective process management is a safeguard and reasonable means of control. There are also a number of uncertain risk factors in the process of reimbursement, requiring financial staff to improve their learning and risk-preventive awareness, as well as a risk-preventive awareness for every employee of the enterprise. Given the different types of business of each enterprise and the different organizational structures within the enterprise, the enterprise should establish and improve its own cost reimbursement system and control methods in order to ensure that reimbursement is properly controlled。
(author: yiatun supply chain inc., shenzhen city)
