DATABASICS Time & Expense Blog

Approving Expense Reports: Pre-Payment vs. Post-Payment


A recent discussion topic from an Accounting Director debates that companies who have switched from post-payment reviews/audits of expense reports to pre-payment approval by a manager(s) have realized sizable decreases in unallowable and out-of-policy expenses. 

To be clear, we’re not talking about pre-trip authorizations, but a post-trip approval of the expense report prior to the expense report being sent to AP for payment. Our experience at DATABASICS is that any differences between pre-payment and post-payment are attributable to who is doing the review.  When the review takes place may not matter.

Managers (pre-payment) are generally familiar with what their employees are doing and own the travel budgets.  They have a real stake in keeping their people in-bounds.  On a daily basis, they handle relatively fewer reports so the process doesn’t become excruciatingly boring. 

Related Article: How Level 3 Data Is Revolutionizing Expense Reporting

For accounting personnel (post-payment)
, it may be all they do, all day long.  When you’re reviewing reports hour after hour, it’s hard to maintain focus.  On top of that, you don’t know the people and circumstances behind the reports you are auditing.  One would expect managers to out-perform the accounting personnel.  An interesting experiment would be to have managers do post-payment reviews.  We haven’t seen this in practice.  

[CHECKLIST] 10 Key Questions When Choosing Expense Reporting Software

DATABASICS provides cloud-based, next generation Expense Reporting,
P-Card Management, Timesheet & Leave Management, and Invoice Processing automation. Specializing in meeting the most rigorous requirements, DATABASICS offers the highest level of service to its customers around the world.

DATABASICS is relied upon by leading organizations representing all the major sectors of the global economy: financial services, healthcare, manufacturing, research, retail, engineering, non-profits/NGOs, technology, federal contractors, and other sectors.

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