Expenses occur in every part of the business. Without proper insights and involvement spending can go out of control. One of the best ways to stop over-the-limit expenses or to empower employees to spend on behalf of the organization without losing control is to establish business expense policies. Spend strategies will guide you in setting up boundaries and creating controls.
The advantages of establishing business expense policies are substantial. The expense policy should be dynamic which can be refined as needed to better fit the organization. Enterprises have more success with employee compliance when expense policies reflect business culture. With expense policy that encompasses all business spending, the finance team can make significant in-roads into minimizing costs and improving profitability.
Business culture and company view are the two important considerations while developing an expense policy. Organizations should have a complete understanding on how employees are currently spending before looking into the granular details of the spend policies. Companies need to determine how policy violations would be handled. It should clearly define whether over-limit purchases or spend reports need be denied or simply flagged to concerned managers so that they can approve or reject them.
Automation is the Key
By automating processes and approval workflows organizations can achieve consistency in procedures and enhance employee compliance with policies. An automated system minimizes personal interaction and the time it takes to enforce policies, dramatically simplifying unnecessary burdens on the finance department. It ensures end-user awareness and adherence to policy as employees fill out transaction documents like expense reports and purchase orders.
Best-in-class expense report software helps enforce spend policies at the point of spend rather than after-the-fact. It results in proactive enforcement of policies and subsequent prevention of out-of-policy spending.