Poor employee expense management causes financial losses, but good practices allow you to cut costs. With this piece, we want to educate founders and ops directors on the best way to keep tabs on the money their workers spend. If you are looking for ways to cut losses and drive revenue, this blog post is for you.
As an employer, you might trust your team entirely when it comes to claiming back money from you. But not having a proper expense policy or process in place leaves you more open to mistakes – i.e. losing receipts, angering your team by reimbursing them late, or overpaying employees. These mistakes could all end up costing your business.
If you’re now realising the way you manage employee expenses could do with some fine-tuning, we are here to lend you a hand.
What is Employee Expense Management?
Employee expense management is a term used to describe the process of reviewing and approving staff expenses. It also involves a holistic overview of expense submissions over specific periods of time, enabling further investigation of stand-alone cases.
It is most effective when carried out using designated software as it offers quick access to data via a filtering system. It can also help you optimise the process for the best results and provide automated in-depth reports. Without further ado, let’s talk about how can you perfect employee expense management in your strategy.
Make the Process Clear
Many employees report they are prone to making mistakes when claiming expenses. An astonishing majority also confessed to avoiding it altogether. All of this they’ve attributed to the fact that the expense claim process was unclear. We will next walk you through steps to take in order to avoid such an outcome by adding clarity.
Draw Up a Firm (But Fair) Policy
When it comes to your expense policy, transparency is key. If you haven’t already, round up your team and talk openly about your expense and purchase policies. Make sure any new recruits joining you are brought up to speed too.
You should create a policy document and make it available to all. It needs to be thorough but at the same time easy to read and digest. Explaining the conditions in simple terms will prevent staff from constantly asking you claim-related questions, in turn saving you time. We highly recommend adopting an employee onboarding platform, which would include the policy and require new hires to e-sign it.
See That Everyone Benefits From It
Of course, you don’t want your business to be out of pocket. But equally, you shouldn’t expect your team to dig into their own pockets to cover business-related expenses. If they need to spend money on work, that money must be reimbursed.
Often, spending money is what makes money in the long run. Think about a sales executive taking a prospect on lunch to later have them become a long-term client. Or an employee taking a two-week course to sharpen the skills that are essential to their performance in the company.
It might not be feasible for your business to offer such benefits, but the bottom line is that every company should appreciate and respect the expense claim process.
Take Thinking Out of a Process
If you still rely on time-consuming manual processes for managing expenses, you need to modernise your approach. Simply put, it makes you bleed money and you can’t afford that. The good news is that there are a couple of things you can do to fix that.
Remove Friction
The fewer bottlenecks there are along the way, the easier it will be for your staff to follow the process. For example, consider taking a digital approach instead of having your staff fill up paper forms. To save you or your HR hours spent signing them off manually, employ online tools to support your effort.
Tools that are available via an internet browser (cloud solutions) and/or have a designated app, will also help with the common issue of receipts being lost. These solutions, due to their accessibility, allow workers to upload receipts to a digital platform by simply taking a picture. It’s going to prevent loss of the receipts from when they are issued and before they’re submitted as part of the expense claim.
Add Automation
You can also make the process easier and more streamlined by automating certain steps. For example, consider auto-filling areas of expense claims with repeatable information. Such would be the worker’s name, bank details, signature or other static elements.
As for the processes on the approving end, you can set automated notifications and reminders in regard to expense claim approval. For example, once the employee submits an expense, the approver will be notified either via email or an SMS message. It will allow them to review the claim right away.
Online Expense Tracking Solution
You might have gotten a gist of what we are implying by now. To streamline the expenses-related operations and master employee expense management, you will need to onboard an online expense tracking solution. The automation options and functionality may differ from software to software, but there’s one factor you must look out for.
Centralised Expense Management System
The core of a smooth, straightforward and quick employee expenses submission and reimbursement process is centralised document storage. This is where you can find and access expense submissions, receipts, and statements uploaded by your staff for in-depth analysis.
We offer a centralised expense management module that comes with several perks. It is designed to help you customise the process to your liking and the nature of the business. The benefits include a mileage calculator, global tax calculator, currency converter and flexible expenses approval process. These and other features will help you build a steady workflow.
Summary
By optimising the process of expense submission and reimbursement, you won’t just prevent billions of pounds in losses. With proper employee expense management, you are likely to see the growth of ROI. The key areas to focus on are clarity and simplicity. Less friction and clear boundaries will encourage your staff to use the company’s money for improving the way the business runs.
It can be achieved by including a centralised expense management system in your strategy. It will also give your full visibility of employee spend. Additionally, it offers better accessibility, an easier approval process and long-term benefits.
Ready to streamline your expense management? Let us know.
