This page provides guidance to help properly document a Business Purpose to ensure compliance with university policy and governing regulations, and to avoid delays in processing financial transactions.
The Business Purpose provides the justification for the expense and should be written so that someone reading it at a future time would have sufficient information about the activity (for example, provide context, spell out any acronyms, include full titles and department names) and why it was a permissible Stanford expense.
Basic Elements
The Business Purpose should include six basic elements:
- Brief summary of the expense
The first 30 characters (in ERS) or first 20 characters (in PCard) of the business purpose will display on reports and should be a brief description of the expenditure. Departments may have a 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 (PCard) transaction is related to a business meal, the who component would be a list of the attendees and their affiliation to Stanford. If there are five (5) or more individuals, attach documentation, such as an attendee list to the transaction. If a list of specific individuals is not available, provide a description including the number of attendees (e.g., Payroll Department; 26 employees) or for larger events (Conference attendees, approximately 350 faculty and staff). - What activity was performed?
Explain the activity or circumstance related to the expenditure. - When did the activity occur?
Provide the date or inclusive dates when the activity took place. Dates included in the Business Purpose can be more general (e.g., the dates of an entire trip) while individual expense lines, such as for a meal during a trip, will be attributed to specific dates. - Where did the activity take place?
Provide the location of the activity, such as to/from destination, restaurant name and city, or other appropriate information. If the expense is for an online service, such a meal delivery service or email marketing tool, indicate the name of the website and the location of where the good or service was utilized, for example, the location the meal took place, or where the marketing tool is used. This supports the recording of use tax. - Why did the activity take place, and how did it benefit Stanford or the sponsored project?
Describe the benefit to Stanford. For example, does it support ongoing research or teaching efforts? If the expense is charged to a sponsored project, the business purpose should make the project benefit explicit.
Best Practices
- If the Business Purpose exceeds the character limit, attach a document with the Business Purpose, and refer to it in the business purpose field.
- If there are specific restrictions on a funding source, it is recommended that preparers include information about the allowability of the expense in the Business Purpose.
- When a single event incurs multiple transactions (for example: parking costs, table set-up, caterer and service) include the related transaction number(s) and/or the event name/title in the Business Purpose to help link related transactions.
- The ERS and PCard modules offer two options to enter a business purpose: as a single paragraph or by element (field).
The following examples show acceptable Business Purpose descriptions and answer each of the questions discussed above.
| Type of transaction | Sample business purpose |
|---|---|
| Travel expense | Nelson WHOFR Trip, 4/16-20/2019. 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, 2019. Where: University of Puget Sound, Washington. |
| Business meal | New NSF Grant Lunch 3/14/24. Who: Professor Zack Mayo and Professor Emil Foley, and PhD students, Paula Pokrifki and Sid Worley from the Stanford Doerr School of Sustainability. What: Working lunch meeting. When: March 14, 2024. Where: Axe & Palm - Stanford, CA. Why: Met to discuss applying for a National Science Foundation (NSF) grant to study capybara habitat restoration in Brazil. |
| Purchase of goods | 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 FY2019, awarded on December 1, 2019. Where: Department of Homeopathy, School of Wellness. |
| Online service | Email marketing tool. Who: Donna Black, Director of Marketing and Communications, Financial Management Services (FMS) What: Mailchimp monthly marketing service Where: Mailchimp.com to be used by Donna and the MarCom team at Stanford Redwood City campus and at their homes when working remotely When: For the month of March 2026 Why: Monthly marketing software provides real-time analytics on communications and ability to track audience data. |
| Honoraria | Redford Presentation, 7/4/2019. 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, 2019. Where: Memorial Auditorium. |
Human Subject Guidelines and Examples
- Do not list human subject participant names in a business purpose.
- Identify the study using a Protocol ID or other study identifying number.
- Providing the study title or subject description is optional based on the confidentiality requirement for the study.
The application of these general guidelines will vary based on transaction type.
| Transaction type | Sample business purpose |
|---|---|
| Non-PO Payment – direct payment to human subject payee | Hum Subj Payment, Who: ID#12345 (or other study identifying number), What: Chronic Pancreatitis (study title optional for confidentiality), Why: participation in study, When: January 27, 2020 (date participation) Where: Study takes place in Palo Alto. |
| Reimbursement for Human Subject Travel – human subject is the payee | Hum Subj Trav Reimb, Who: ID#12345 Why: Human subject travel reimbursement, Protocol ID #12345 (or other study identifying number), What: Chronic Pancreatitis (study title optional for confidentiality), Where: Los Angeles to Stanford, When: January 27 through February 2, 2020. |
| Human Subject Advance Request – PI or study administrator is the payee | Please note: A human subject advance request should include the number of participants and the amount each participant will be paid. 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, 2020 (date of request). Where: Study takes place in Palo Alto |
| 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, 2020 (dates of study). Where: Study takes place in Palo Alto |