Resources: Guidelines for Writing a Clear Business Purpose

This job aid provides guidance to help you properly document a Business Purpose to ensure compliance with University policy and governing regulations, and to avoid delays in processing financial transactions.

On this page:

General Guidelines

The Business Purpose provides the justification for the expense.

The Business Purpose should answer five basic questions:

  1. Who was involved in the activity?
  2. Give the name(s) of the person(s) and their organization and/or department involved in the activity. For example, if a reimbursement request or Purchasing Card transaction is related to a business meal, the WHO component would be a list of the attendees and their affiliation to Stanford.

  3. What activity was performed?
  4. Explain the activity or circumstance that gave rise to the expenditure.

  5. Why was the activity done and how did it benefit Stanford?
  6. Describe the benefit to Stanford. For example, does it further ongoing research or teaching efforts?

  7. When did the activity occur?
  8. Indicate the date or inclusive dates the activity took place. Specific dates are also part of the item descriptions, and dates included in the Business Purpose can be more general (the dates of an entire trip, for instance, instead of the date of each meal).

  9. Where did the activity take place?
  10. Give the location of the activity: to/from destinations, restaurant name and city, or other appropriate information.

In general, a Business Purpose should be written so that someone reading it at some future time (e.g., an auditor reviewing the expense 2-3 years later) would have no questions about the activity and why it was a permissible Stanford expense.

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Examples of Business Purpose Descriptions Which Meet University Requirements

The following examples show acceptable Business Purpose and answer each of the questions discussed above.

Note that the first few characters (up to 30) present a brief summary that would be meaningful on an expenditure statement.

Travel Expenditure Example

NELSON WHOFR TRIP, 4/16-20/07

WHO:  Professor Mike Nelson and two of his PhD students, Nick James and Elias Storm. WHAT:  Attendance at the WHOFR (WHales are Our FRiends) workshop where Professor Nelson presented his paper on  An Analysis of the Orca Language . WHY:  The workshop supported Professor Nelson's research on the U.S. Navy grant Cetacean Communication, award WTALK, and has been approved by the sponsor. WHEN:  April 16-20, 2007. WHERE:  University of Puget Sound, Washington

Business Meal Expenditure Example

ZACK MAYO GRADUATION DINNER

WHO:  Zack Mayo, PhD (2007), Professor Emil Foley (1946), and PhD students, Paula Pokrifki and Sid Worley. WHAT:  Celebration of attainment of PhD degree. WHY:  Dr. Mayo has worked with Professor Foley as a PhD student for three years while studying for his degree. WHEN:  June 18, 2007. WHERE:  Scott's Seafood, Palo Alto.

Purchase of Goods Example

QUALITY IMPROVEMENT AWARD

WHO:  Dr. Peter Mitchell. WHAT:  Trophy for the Department of Homeopathy Quality Improvement Award. WHY:  Award presented annually to the administrative associate who made the most significant improvements in work quality, as measured by number of purchase requisitions and reimbursements that were processed without incident. WHEN:  For FY2007, awarded on December 1, 2007. WHERE:  Department of Homeopathy, School of Wellness.

Honoraria Payment Example

REDFORD PRESENTATION, 7/4/2007

WHO:  Robert Redford. WHAT:  Participation in a panel discussion on Western Movies in American Cinema. WHY:  Part of the Drama Department's Summer Seminar Series. WHEN:  July 4, 2007. WHERE:  Memorial Auditorium.

Human Subject Payment Examples

General Guidelines for Business Purpose for Human Subject Transactions:

  • Human subject names should not be in a business purpose
  • Study should be identified using a Protocol ID or other study identifying number
  • Study title or subject description is optional based on the confidentiality requirement for the study
  • Human subject advance request should include the number of participants and the amount each participant will be paid

The application of these general guidelines will vary based on type of transaction. Here are some examples:

Non-PO Payment – Direct Payment to Human Subject Payee

Human subject payment, Protocol ID #12345 (or other study identifying number), Chronic Pancreatitis (study title optional for confidentiality), January 27, 2015 (date participation).

Human Subject Advance Request – PI or Study Administrator is the Payee

Who:  William Jones PI, What:  advance for human subject incentives, 8 participants at $150 each, Why:  Protocol ID #12345 (or other study identifying number), Chronic Pancreatitis, When:  January 27, 2015 (date of request)

Expense Report – to request reimbursement or clear advance – PI or Study Administrator is the Payee

Who:  William Jones PI, What:  clear advance ADV87654 for human subject incentives, Why:  Protocol ID #12345 (or other study identifying number), Chronic Pancreatitis, When:  January 27 through February 28, 2015 (dates of study)

Reimbursement for Human Subject Travel – Human Subject is the Payee

Human subject travel reimbursement, Protocol ID #12345 (or other study identifying number), Chronic Pancreatitis (study title optional for confidentiality), Los Angeles to Stanford, January 27 through February 2, 2015.

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Policy References

Reimbursement of business expenses is governed by Administrative Guide Policy 5.3.6 (Payments to Nonemployees), 5.4.1 (Expense Advances), 5.4.2 (Travel Expenses), and 5.4.3 (Reimbursement of Expenses).

For a summary of policy, see Policy Notes: Business Expense Policy.

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