Compliance Audit Proofing
Reporting and compliance is the third layer of the foundation of sales flow. While meals and entertainment provide important strategic advantages, its important that all costs be properly documented. An expense report, for example, along with the appropriate documentation, is both an IRS requirement and a useful tool to facilitate planning in the future.
Although they are only 50 percent deductible, meals and entertainment require proper substantiation under IRS code section 62. The taxpayer must be able to substantiate claimed expenses on a report by providing receipts with the amounts claimed, the time and place of the meal or entertainment, the business purpose of the event, and the business relationship of the entertained person(s).
Its a common misconception that receipts are not needed if the expense appears on a credit card statement. But in the event of an audit, both the expense report and the corresponding receipts will have to be provided.
Integration Sales and Operation Flow
As previously stated, proper reporting enables a business to plan for the future. Expense reports keep the sales management team up to date on the status of a possible relationship, which can in turn be used for forecasting purposes.
These forecasts are very useful when communicating with the operations team because they provide vital information about the current sales flow. But it all begins with communication, which is vital to the integration of sales and operational flow in the FlowFirst management model.
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