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
- Human Subject Guidelines and Examples
- Policy References
(For Human Subject expenses, see Human Subject Guidelines and Examples below.)
The Business Purpose provides the justification for the expense.
The Business Purpose should include six basic elements:
- Brief Summary of the expense, which will display on reports
The first 30 characters of the business purpose will display on reports and so should be a brief description of the expenditure. Your department may have specific protocol or format for the summary description.
- Who was involved in the activity?
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.
- What activity was performed?
Explain the activity or circumstance that gave rise to the expenditure.
- When did the activity occur?
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).
- Where did the activity take place?
Give the location of the activity: to/from destinations, restaurant name and city, or other appropriate information.
- Why was the activity done and how did it benefit Stanford?
Describe the benefit to Stanford. For example, does it further ongoing research or teaching efforts?
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, and will show in the reporting.
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 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 Guidelines and Examples
- 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
Hum Subj Payment, 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
Hum Subj Adv, ID#12345 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
Hum Subj Adv, ID#12345 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
Hum Subj Trav Reimb, ID#12345 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.