Founders and MDs know that while business expenses are an important part of finances, it’s an area susceptible to corner-cutting. It is mostly due to the amount of manual work that goes into every aspect of expenses-related procedures. This blog article will teach you how to streamline these processes.
If you’re still operating a spreadsheet and paper documentation system, you’re hindering your business growth. You are wasting time and effort on tasks that are but manual labour. Why make your employees waste valuable time by manually typing in their expenses every month? Why expose your business to threats of human error-driven damages?
Instead, we urge you to a more modern, smoother and trustworthy approach. Which, on top of all, will save you heaps of time and risks. So, let’s dig into today’s topic: expenses and how to handle them effortlessly yet effectively.
How Do You Streamline Expenses?
There are several ways to streamline expenses and it works best if you implement them all:
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Make the process clear and easy to follow;
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Digitise it;
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Use a centralised system;
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Automate as much of it as possible;
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Integrate your finance-related tools with one another.
This is just a quick run through it. Next, we will be looking into these steps with more depth.
Avoidance of Expenses
It’s a curious concept to many, but spending money can make your business more profitable. For example, an employee who pays to attend a conference or training session could gain insight that improves your profitability and productivity. Given they are refunded and end up honing their skill, this sounds like a win-win. Yet many are often avoiding anything to do with expenses. Let’s explore why.
Blurry Lines of Business Expenses
All too often there is a big reservation employees face when having to spend money from their pocket. Namely, a worry about what is permitted to be run through expenses. In other words, your employees might be hesitant to spend money because they’re unsure whether they’ll be reimbursed.
The best solution is to come up with a crystal clear expenses policy. And then ensure that every employee familiarises themselves with. Keep it short, digestible and easy to understand. We recommend you include it in your onboarding process, so your company’s business expenses policy is delivered to new hires on day one.
The Struggle to Claiming Expenses
One in five workers admitted they don’t claim for expenses if they think the amount is too small. Wanting to avoid the hassle of the expense admin was the second most popular reason for opting not to claim expenses. It was followed by feeling embarrassed about expecting the reimbursement. Other common reasons were the process being unclear or long-winded, the employee not feeling entitled to be paid back, or loss of receipts.
In summary, two key reasons are making the employees hesitant to spend company money: the mindset and the process. They are both closely intertwined and next, we will explain their connection.
Trust Employees to Spend Wisely
Expenses can oil the wheels of your business, but employees need to feel empowered by a clear expense policy and procedure. Give your workers responsibility to spend within the terms of your policy rather than requiring close supervision by a manager. This will help to make the process less onerous.
A Foolproof Process
As an employer, you need to create a process that is smooth, quick and has as few bottlenecks as possible. The less effort and thinking your staff needs to do, the more they trust the process. It will also translate into the fewer mistakes they make and the quicker reimbursements they get. This approach can help prevent accounting errors and ensure that employees aren’t missing opportunities or going out of pocket because of a poorly organised system.
A clear process is a foolproof process. Not only is it easy to follow, but it fills employees with confidence they will never be at a loss. They then have no reason not to trust the system and are generally happy to follow the procedures.
Accessibility and Centralisation
Many employees don’t like dealing with expenses for reasons other than lack of clarity. For example, some avoid it because to claim the money back receipts are needed. This is usually the issue with paper receipts. They are easily lost and often cannot be submitted upon being issued.
The solution to this is getting digital centralised document storage that’s easily accessible across multiple devices. This way your staff can submit their receipts on the go, using their mobile phones. And, given they’re all stored in one place instead of being scattered, the process of claiming business back will speed up exponentially.
Automating Your Expenses System
Expense reports are a hassle for each party involved, at each stage of the process. And this is often the reason why it’s error-ridden. Automating it minimises the number of steps required to take, leaves close to no room for human mistakes and streamlines the otherwise lengthy process.
Online Expenses Management Platform
By investing in software that enables expense automation, such as Timesheet Portal, you will save more money than you spend. As we have already proven, businesses lose tremendous amounts of money largely due to ineffective expense claim approval processes.
When using Timesheet Portal, your contractors can submit online expense claims forms via their preferred device. Then have them approved by your clients, who may also do so on the go. You can choose to enforce a multistage approval process, granting more people visibility over claims before they are approved. The tool also boasts a feature that calculates mileage based on postcodes, helping avoid incorrect mileage expense claims.
Summary
The lack of an effective expense claim approval process can damage business in multiple ways. Ranging from financial losses to bad publicity and changes in the office environment, it poses a lot of risks if left unoptimised.
The good news is that averting these dangers is relatively easy. In the era of modern technology, simply entrusting the process to automation software will save you far more than the solution costs.
Tired of losing money through expense claims? Let us help you.
