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
- Examples of Business Purpose Descriptions Which Meet University Requirements
- Policy References
The Business Purpose provides the justification for the expense.
The Business Purpose should answer five basic questions:
- Who was involved in the activity?
- What activity was performed?
- Why was the activity done and how did it benefit Stanford?
- When did the activity occur?
- Where did the activity take place?
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.
Explain the activity or circumstance that gave rise to the expenditure.
Describe the benefit to Stanford. For example, does it further ongoing research or teaching efforts?
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).
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.
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.
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.