Add an Expenses Page
I am definitely what we would call in the tattoo biz " An OG Pirate From WAY back" I did the artists old hand to mouth trick for over 20 years. Eventually my trusted accountant hit some rough times and ultimately that lead to missing dates and forms and generally sloppy work which landed yours truly in the crosshairs of an IRS audit.
One of the main things I was unable to account for was meals and entertainment even though I take many meetings at social events. In trying to outpace my uncluttered self in the future I came up with this plan. Put an Expense Report form right on your site, fill it out at the end of said events with all the details and receipts you will never remember. That form will sit on the back end until you need it but if you want it to be seamless, you will need to connect it to Google Sheets through Zapier.
This was my request and the response that I got back from ChatGPT.
"I’m making a form. The form is to for my website and is to take into account all the best practices for filling out an IRS ready expense report as well as images of the receipts and notation of all parties involved. What lines and specifications would the form need to be compliant
ChatGPT said:
To create a form that complies with IRS requirements for expense reporting, it should capture the following details:
General Information
Date of Expense: The exact date the expense was incurred.
Vendor Name: The name of the person, business, or entity paid.
Location: The city, state, or location where the expense occurred.
Expense Details
Expense Type: A dropdown or field to categorize the expense (e.g., Travel, Meals, Supplies, etc.).
Purpose of Expense: A description of why the expense was incurred (e.g., business meeting, project supplies).
Amount: The total cost of the expense.
Receipt Details
Receipt Image Upload: A section to attach an image or scanned copy of the receipt.
Accepted formats: JPEG, PNG, or PDF.
Note: The receipt must show the date, vendor, amount, and itemized details.
Parties Involved
Participants (for meals/entertainment): A field to list the names and roles of individuals present, along with their business relationship.
Business Purpose: A brief explanation of the meeting, event, or purpose involving the parties.
Payment Information
Payment Method: Select from a dropdown (e.g., Credit Card, Cash, Check, ACH).
Last 4 Digits of Card Used (if applicable): To verify specific transactions.
Internal Use
Project/Job Code (if applicable): For assigning expenses to specific business projects.
Approval Section:
Submitted By: Name of the person submitting the report.
Approved By: Name and signature of the approver.
Notes/Additional Information: Optional field for clarifications.
Form Specifications
Date Fields: Must be formatted (MM/DD/YYYY).
Drop-Down Options: Categories should match your accounting codes for easy reporting.
Digital Signatures: Include fields for electronic or manual signatures to confirm accuracy.
Compliance Reminder: Add a disclaimer, such as:
“This report is to document business expenses as per IRS guidelines. Any false or inaccurate reporting may result in penalties.”
Would you like assistance creating the digital structure or automation for this form?
4o
You said:
Is that all? How about the people involved
ChatGPT said:
ChatGPT
You're absolutely right—tracking details about the people involved is crucial, especially for expenses related to meals, entertainment, travel, or events. Here's an expanded list of fields and best practices to ensure IRS compliance:
Detailed Information for People Involved
Full Names of All Attendees:
A field to list each individual’s full name.
If many people were involved (e.g., a large event), include a note such as “See attached attendee list.”
Business Relationship to the Company:
Dropdown options for common relationships:
Employee
Client
Prospect
Vendor
Contractor
Other (with a text box for specifics).
Role or Title:
A field to specify the attendee’s role or title (e.g., Marketing Manager, CEO, Vendor Representative).
Event/Meeting Details:
Purpose of the Meeting:
Example: "Negotiated new client contract" or "Discussed project milestones."
Type of Event:
Examples: Business Lunch, Team Meeting, Client Presentation, Conference.
Agenda or Topics Covered (optional):
A brief description or option to upload an agenda or minutes.
Proportional Expense Allocation (if needed):
If the expense is split among multiple parties, include a calculation or field for how the cost is distributed (e.g., per person, by company percentage).
Hosting Information (if applicable):
If you hosted the expense, indicate who covered it (e.g., company paid vs. attendee paid individually).
Additional Documentation for People Involved
Affiliation or Business Name:
If attendees are from external organizations, capture their company or business name.
Contact Information (Optional):
Useful if additional verification is needed (e.g., email or phone).
Notes or Context About the Relationship:
Example: “Key client we’re pitching to for a $10M deal” or “New vendor onboarded for production.”
IRS Notes on Documentation
For entertainment or meal-related expenses, IRS Publication 463 requires the following:
The cost of the meal/event.
The date and place of the meal/event.
The business purpose of the expense.
The names and business relationships of all people involved.
To fully comply, your form should integrate:
Participant Details: Comprehensive information about attendees (names, roles, and relationships).
Business Purpose: A clear explanation of how the expense relates to generating income or supporting the business.
Receipts: Attachments showing itemized costs, date, and location.
Would you like me to suggest specific software or automation tools to help streamline this reporting process?
4o
You said:
No thank you. I think I want to just work that in to a form on my website that updates to my cram and Google Sheets. Do you see any issues I may not be aware of with that?
ChatGPT said:
ChatGPT
Integrating your expense report form into your website and having it update directly to CRM and Google Sheets is a smart and efficient workflow. However, there are a few potential issues or areas to consider to ensure smooth operation and compliance:
Potential Issues to Address
1. Data Security and Privacy
Issue: Sensitive financial and personal data (e.g., payment details, receipts, and attendee information) needs to be protected. If your form isn’t secured, this could lead to data breaches or non-compliance with privacy regulations (e.g., GDPR or CCPA).
Solution:
Ensure the form is encrypted (use HTTPS).
Store data securely, especially if your CRM is cloud-based.
Limit access to expense data to authorized personnel only.
2. Accuracy and Validation
Issue: Incomplete or inaccurate submissions could disrupt reporting and compliance.
Solution:
Use required fields to ensure all necessary data is entered.
Include dropdowns or standardized input options for categories like expense types and relationships.
Add conditional logic (e.g., ask for "Names of Attendees" only if "Meals & Entertainment" is selected).
3. Image Handling (Receipt Uploads)
Issue: Large image files or unsupported formats can cause upload errors or clutter your Google Sheets/CRM with oversized data.
Solution:
Restrict upload size and format (e.g., JPG, PNG, PDF).
Consider integrating an OCR (Optical Character Recognition) tool to extract key data from receipts automatically.
4. Integration Workflow
Issue: Syncing the data between your website, Google Sheets, and CRM can sometimes break or introduce inconsistencies, especially with custom setups.
Solution:
Use tools like Zapier or Make (formerly Integromat) to ensure real-time, error-free syncing.
Set up error alerts if data fails to sync properly.
5. IRS Compliance
Issue: The IRS has strict requirements for expense documentation. If data is missing or stored improperly, it could lead to audits or penalties.
Solution:
Ensure all mandatory fields are included (date, amount, business purpose, attendees, receipt upload).
Use Google Sheets formulas or CRM tags to track and verify compliance automatically.
6. Scalability
Issue: If your business grows or more people start using the form, the manual tracking in Google Sheets might become inefficient.
Solution:
Plan for scalability by integrating directly with your accounting software (e.g., QuickBooks or Xero).
Automate approval workflows to handle increased volume.
7. Audit Trail & Records Retention
Issue: IRS requires records to be retained for at least 7 years for tax purposes. A poorly managed system may lose data over time.
Solution:
Back up your Google Sheets regularly.
Store receipt images in a structured, cloud-based location (e.g., Google Drive or Dropbox).
Timestamp all entries automatically for tracking.
Additional Considerations
User Experience: Ensure the form is mobile-friendly, as users may be uploading receipts directly from their phones.
Automation for Categorization: Use formulas or CRM workflows to auto-categorize expenses based on user input, saving time during reporting.
Approval Process: Include a clear process for management approval of expenses (e.g., a separate approval column in Google Sheets or CRM notifications).
If you’re confident with web forms and integrations, this approach will work well. I can help you create a structured plan or the specific field mapping to Google Sheets or CRM if you need assistance!
4o
You said:
In terms of the data breaches and privacy regulations… they would be my receipts and expenses and it would be me at risk sand not my clients, is that accurate?
ChatGPT said:
ChatGPT
Yes, that’s correct—if the form is solely for managing your own receipts and expenses, the privacy and data security concerns are primarily about protecting yourself and your business rather than your clients. However, there are still a few key considerations to keep in mind:
Why Protecting Your Data is Important
Financial Security Risks:
Receipts and expense records often contain sensitive information, such as payment methods, vendor details, and possibly even partial credit card numbers. If this data is exposed, it could make you vulnerable to fraud or theft.
IRS Audit Compliance:
If your expense documentation were lost, altered, or accessed by unauthorized parties, it could make it harder to justify deductions during an IRS audit.
Cloud Storage Risks:
When syncing data to tools like Google Sheets, CRM platforms, or cloud storage (e.g., Google Drive), there's a potential for breaches if you don’t have proper security measures in place.
Data Breach Risks with Self-Managed Forms
Although you’re not handling client data, here’s where your own data might still be at risk:
Web Form Vulnerabilities:
If your form is not properly encrypted, hackers could intercept data during submission.
Shared Integrations:
Tools like Google Sheets, if shared with others or left unsecured, could be accessed by unauthorized people.
Cloud Storage Issues:
If uploaded receipts or data syncs are stored in an unprotected location (e.g., an open Google Drive folder), they may become publicly accessible by mistake.
How to Protect Yourself
Secure Your Form:
Use HTTPS for your website to encrypt all data submitted through your form.
If possible, set up a secure login for accessing your expense submission tool.
Protect Google Sheets and CRM Access:
Restrict access to your Google Sheets or CRM database to only you (or essential collaborators).
Enable 2-step verification for your Google account or any third-party platforms.
Encrypt Receipt Files:
If you store images or scans of receipts in Google Drive or elsewhere, ensure they are stored in private folders and avoid sharing them publicly.
Regular Backups:
Regularly back up your expense data to a secure location (e.g., an encrypted external drive or cloud service).
Retention Policies:
The IRS recommends keeping records for 7 years, so ensure you have a reliable system for retaining and protecting these files long-term.
Here is an example of my personal form that I made while setting this up. It may be different for your needs. Talk with your accountant to see what's best for you!
