CFOs and CIOs may overlook spend management to improve controls and compliance with company policy. Compliance with corporate policies ensures that expenses are approved and accurate accruals are made for outstanding invoices. Regulatory compliance is also important, as adhering to VAT regulations and reclamation tools can have a real impact on the bottom line.
The following are two critical KPIs to determine compliance:
Corporate control is a measure of compliance for travel and expense policies. Pre-approval process is hard to achieve, without digitized processes. Without pre-approval process, there is a possibility for expense fraud to happen.
Expense Reports within Policy
When corporate expense policies are in place, there is less scope for employees submitting non-compliant expenses. With managers approving expense reports, there is a possibility for error in policy compliance.
Compliance Measures in Spend Management
Employees spend company money when on business trip. Without pre-approval spending, finance departments struggle to close books and generate accurate accrual estimates.
Benefits of Pre-approved Spend
No late submission of expense reports
Manage budgets with finance and employees aligned
Avoid fraud invoice payments
Close expense reports faster because of speedier and accurate approval process
Expense reports in line with the policy
Expense report policies ensure that employees don’t really commit fraud intentionally. There are certain expenses that are allowed to be reimbursed by a business and others that should be paid out of pocket. Moreover, a business will have expense policies defined for per diems, mileage reimbursement and other company specific policies.
Automated expense report solution makes it easy to ensure compliance with the corporate policies.
Benefits of Corporate Travel Policy
Reduced administrative overhead of manual audits
Reimburse employee expenses on time
Eliminates out-of-policy reporting headaches
Budget in control
High compliance rate and low errors
No Receipt, No Pay
Put a no receipt, no pay policy in place to let employees know you do not accept expense reports without supporting documentation. This ensures spending is legitimate and expense reports are backed up with appropriate receipts. Also, this ensures employees are using approved flight and hotel vendors when making travel bookings.
Strict Expense Policy
What can be claimed? Is the most common question that employees have. Companies can define in policies regarding what expenses are allowed and how much can be reimbursed for any activity during the business trip.
Automated Approval Workflow
Automate the workflow, rules that automatically routes the high dollar amounts and specific categories to the appropriate approvers. This allows approvers to review expense line items more specifically, so they can send back for resubmission if there is any specific information to be presented.
Expense requests need to be approved prior making business trips. Define pre-approved vendors for flights and hotels, so you can gain control over the long tail spend.
Allow employees to submit expenses electronically with the help of receipt capture through OCR or voice capture on the mobile device with a system that automates audits and rejects corporate policy expense reimbursement requests.
Define approval flow and ensure that all approvers understand what can be approved and what not. Set this into expense management application so the system will auto-reject expenses that are out-of-policy.