When you're a small business, you can get away with sending your employees to conduct business in Davisville Village on their own dime and paying them back from company funds when they arrive home with receipts. But as your company begins to grow and two or three or more people are conducting your business for you, it will get to the point where the transactions are too large for employees to cover from their own funds. Before you reach this point, you should consider opening an expense account.

'Expense account' is a term that is often used by your accounting department to refer to all funds, reimbursed or point of sale, that employees spend while they're out promoting the company's new high temperature insulation. However, what we mean when we talk about an expense account is a dedicated set of funds set aside for employees travel expenses and other expenditures that they can access at the time of the transaction rather than getting reimbursed for their spending at a later date.

Setting up an expense account is relatively easy. Simply open a new business account at your bank and put into it your budget for employee expenses. Alternatively, you can sign up for a company credit card and pay that bill from your expense budget. Your bank should at this time provide you with some means to allow your employees to access these funds while out doing real estate jobs, such as bank cards, credit cards, or cheques made out in the company's name.

When you open your expense account, have a meeting with all employees and go over the rules for using the expense account, i.e what it can be spent on and what it cannot be spent on. For instance, during travel, flights, hotel rooms, and meals would be on the expense account, but only flights, hotel rooms, and meals that are reasonably priced. Let them know that their spending will be monitored by accounting and that they will be required to explain themselves when odd charges like canvas printing come up.

To reduce the chances that an employee might be tempted to abuse the expense account, you might consider only handing out the bank or credit cards tied to it when the employees are being sent to the Paco water pumps conference. Then you can take the cards back when they return. Limit the number of people who know the codes to the accounts and consider setting a daily or transaction-based spending limit.