Handling employee expenses can be time-consuming, complex, arduous, and a hassle for your finance team. Fortunately, there are ways to make the method less of a drag. When it comes to corporate expenses, there are three major requirements.
a) Track and control businesses operational expenses
b) Conduct analytical accounting of expenses
c) Gather invoices and supporting document
When you do these well, you are quick on the way to a healthy spending culture. Hence, what is the best way to track and control staff expenses? How to provide your workers the flexibility they require to get into the world while making sure integrity and security of business funds?
1. Generate Staff Expense Management Plan
The poor way to handle business spending is to barely manage it at all. It is typical of small organizations. Firstly, you feel that you don’t require a strategy as the amounts you spend are so little. And the manager handles all the money anyway. But how should the staff spend, how much, and on what? It will be included in the well-written expense policy. There are a few basic principles.
a) Make it transparent, concise, friendly, and simple
b) Avoid listing every single possible expense. The guidelines are better than long lists
c) Think about ways to automate
d) Include other teams in the procedure
Great spending policies make sense to the entire organization- not only for the financial controller or CFO.
2. Keep Clear Spend Methods in Place
Once the policy is ready, you must handle methods. Corporate spending includes more than simply setting a budget and providing your team the funds. By following an expense management procedure that is thorough and methodical, you can incentives staff to manage their spending. A detailed and transparent method can be helpful for staff as it for the management.
While deploying an expense management method, make sure to search for ways to make it fast and easy for staff to follow. For instance, you could offer staff pre-filled forms, including automatic prompts for mandatory supporting documentation. Modern expense management solutions walk your teammates through the entire spending process- from payment, approvals, to receipts.
3. Set up a Budget per Expense Category
A good way to manage staff expenses is to implement a detailed expense policy. It includes setting a maximum budget for every expense category in advance- corporate trips, hotel stays, purchasing equipment, restaurant bills, and much more.
For every expense, you must define how much every staff can incur and let them know that they will not get reimbursement beyond the specified limit. Some kinds of expenses may be pre-approved, while others need explicit approval from the managers. But keep the rules as easy as possible. Expense policies work excellently when they are easy to understand, precise, and where staff can remember them by heart.
4. Offer Suitable Payment Methods
When you want to be truly effective in controlling staff expenses, the best way is to provide them a tailor-made payment process. It is where the business expense cards come in. With the expense cards, you can load them with a particular amount in advance to be utilized for a wide range of expenses incurred in the field: petrol, restaurant, hotel, and more.
The cards combine security and flexibility. Workers can spend like they have their business credit card. But the managers and the finance department can set specific limits for every card and check what a worker has spent any time.
A virtual credit card is the best solution for online expense management like booking a hotel, renting a car or property, and more. They are also ideal for solution subscriptions and digital advertising. This card can be used as per your staff requirements and can be controlled in real-time via a secure internet platform. It offers a transparent and detailed oversight while allowing staff to make online purchases conveniently.
5. Digitize Invoice Retrieval
When your teammate pays for something, they need to keep the receipt is a simple concept yet leads to endless issues for the accounting and finance teams. No matter how diligent the workers are, they are going to forget or misplace receipts from time to time. It indicates loads of back and forth with the finance department to explain themselves and search the payment proofs.
To avoid wasting time, gathering invoices, and ensure you receive all of them, you must digitize receipt collection. Electronic receipts are accepted by the tax offices everywhere. The easiest way is a receipt scanning application. The workers pay for something, then instantly takes a snapshot of the receipt the moment they get it. There is no more data entry for the finance department, and the number of misplaced receipts becomes insignificant.
6. Automate Processes
Identify the processes that take time and are least productive and go digital by adopting a cloud-based expense management system. Focus on effective tools for invoice retrieval, handle purchase requests, and process expenses in real-time. Automating processes will help you to view better results, enable the team to work with greater agility, and freeing up time for other essential activities.
Search for the Right Expense Control Balance
Handling employee expenses is about looking for the right balance between agility and control so that everyone’s interests can be served. Staff needs to perform their task with convenience and flexibility, and you require having a transparent and detailed oversight over business spending. Hence, consider these top six tips above and the options that could be the best for you and your teammates.