In university finance, every financial transaction requires a clear business purpose to ensure accountability and transparency. This statement justifies why a specific expenditure is necessary, reasonable and an appropriate use of university funds. Without a detailed business purpose, transactions may face increased scrutiny from auditors or experience delays in processing or approvals.
For example, when uploading receipts to the PCard Center, cardholders must select an appropriate business purpose category. This selection is essential because it directs the reconciler to the correct expense account code, ensuring the university’s financial records accurately reflect departmental spending.
Examples of PCard Business Purpose Categories
A few of the business purpose categories that can be selected in the PCard Center include:
- Advertising
- Business Meeting / Workshop
- Business Services
- Donor/Gift Development
- Educational Supplies
- General Supplies
- Graduation Events
- Lab Supplies/Testing
- Library Books and Journals
- Medical Supplies
- Moving Services
- Office Supplies
- Other
- Professional Development
- Recruiting
- Repair and Maintenance Research
- Shipping/Handling Fee
- Student Activities
The Five “Ws”
A detailed business purpose should be recorded directly on the receipt or on a cover sheet uploaded with the receipt. It must provide enough detail for an independent reviewer to understand how the expense supports the university’s mission. To achieve this, every transaction should be backed by documentation that answers five key questions:
- What was purchased?
- Who was the purchase for?
- Why was the purchase necessary?
- Where was the purchase made?
- When was the purchase made?
While the provided receipts typically satisfy the requirements for where and when a transaction occurred, the written business purpose must explain the what, who and why. This level of detail is also required when requesting changes to financial accounts. For example, if a department requests an increase to spending limits on a purchasing card, the request must include a business purpose that explains the necessity for the adjustment.
By consistently providing thorough justifications, we can help the university meet policy and auditing requirements while ensuring resources are used effectively to support education and research.