Controlling travel expenses of employees when costs are being incurred in overseas is one of the major challenges that managers are facing today. Diverse currencies and different legal systems add to the complexities of expense management.
Expense fraud is another notable problem caused by insincere employees who take advantage of and do not utilize expense management properly. Processing travel expenses sometimes can be prolonged and extend to weeks and false travel costs can go unchecked.
Today, digital technology is providing more powerful and effective ways for streamlining overseas costs and ensuring that your employees are not indulging in out of business expenditures.
a) Keep Your Expense Policies Intact
Many small business enterprises still have not implemented proper expense policies to cover business travel expenses. An effective travel policy covers both overseas as well as domestic travels providing clear and accurate guidelines on what types of expenses can be claimed and what the processes are for claiming.
A cloud-based expense management software solution allows policy reminders in real-time through on-screen notifications thus alerting the finance department automatically whenever costs violate the set limits.
b) Using Expense Management Application
Today, smartphones have become a powerful and essential tool for all business travelers and have transformed the way how employees track, manage, and record their travel expenses when they are on an overseas trip.
A modern expense management software uses Automatic Character Recognition (ACR) for scanning all paper receipts easily and converting it into a digital expense report quickly.
The streamlined process helps in updating accounts when costs are incurred and also eliminates the aching post-trip task of manually processing foreign receipts.
c) Controlling Currency Conversions
Continuously dealing with fluctuating exchange rates is a unique challenge while handling overseas expenses. Manual currency conversions make processing reports error-prone and slow for the finance departments.
So, by leveraging a digital expense management software solution helps in eliminating these problems and automating the entire process of handling multiple currencies.
Based on exchange rates, accurate currency conversions are made during the time the cost was incurred, creating an easy and simple way of managing a difficult area of expense management.
d) Figuring Out Tax Rules
Figuring out tax rules for various countries is a challenging task and avoiding this area means that enterprises are missing out tax saving and legally claiming back eligible expense costs.
Recovering such costs now can be made simple with a digital expense management system as it provides an easy access to the required data that tax authorities’ needs.
Also, it is easy to share expense information with overseas VAT reclamation agencies. It provides options to recover costs for organizations by preventing difficulties of international tax laws that nobody wants to get involved in.
e) Cutting Costs in The Right Place
Booking a cheaper hotel can be quite tempting, but if the location needs a long cab ride to and from your business destination then you are saving less.
Low-quality lodging and accommodation can lead to lack of productivity and motivation from employees and result in reduced job output.
Instead, if employees are sincere and cut down some expenditure for unofficial personal reasons, it can prove to be effective in expense management.
The Bottom Line
An automated expense management system provides a real-time visibility over employee spending and ensures that your employees are not overspending on their business travel. The approaches mentioned above help to avoid redundant costs and manage savings useful for business.