Is your business splashing out a little too much lately? Are you finding it increasingly difficult to track receipts? We get you. Expense management can be a bit of a pain, particularly when you don’t have the resources to do it efficiently.
However, if you don’t reign in your expense management, you could ultimately cost your business more money and time in the long run.
So, how do you go about improving the process?
First thing’s first: What is expense management?
When we say, ‘expense management’, what we really mean is the processes and systems used to request, authorise and pay your employee-specific expenses. These expenses may be travel (i.e. train tickets, food or hotel bookings) or work related.
In order not to upset your employees, set your business back, or miss out on claiming back your rightful tax deductions, you should work towards organising your expense management process better.
With that in mind, here are eight tips for improving your business’s expense management.
1. Organise your paper trail
If you process employee expenses manually, the chances are you physically manage and store paper documents.
In order to ensure each expense is tracked and processed accurately, you’ll need to keep a rigid filing system for your forms, invoices and receipts. Ultimately, any lost paperwork could void your expenses or lose you your tax benefit.
To keep your team organised, try to deal with your expense management paperwork regularly and in little chunks. This will help you to keep a close tab on your documents. Alternatively, switch to a digital tool to avoid any lost files.
2. Keep expense paperwork away from other files
We know. It’s annoying to sift paperwork into dedicated stacks or filing cabinets, particularly when you’re busy. But, gosh, separating expenses from other financial documents will save your HR team a lot of hassle.
Additionally, it’s useful to open a bank account and dedicate it entirely to your business expenses.
3. Reduce your paperwork stack
In some instances, you may be able to take some of the paperwork off your to-do list.
For instance, if a group of your employees are booking out rooms in a hotel, try to complete a group booking. Less receipts, less hassle, and you may even gain a nice discount!
Ultimately, any predictable expense will be easier to track and manage, so bear in mind any future work trips or socials.
4. Standardise your process
Without a strict process, your employees may stray from the beaten path.
Alice from Marketing could be requesting an expense via email, whereas Bryony in Sales might opt to fill in an expense request paper form.
Your HR team can only handle so much chaos. Try and keep one, strong system in place for your expense claims, approval and audits.
5. Educate your employees
Going on from point three, it’s important to discuss your processes with your employees, both new and old.
Outlining the set process, tools and expectations for expense management will clear up any future misunderstandings and give you grounds to dismiss any incorrect practices.
6. Create an expense policy document
If your employees do have questions about your expense process, it’s always useful to provide them with an accessible policy document.
Whether it’s online or in paper format, this document should outline the expense management process. Ideally, it should be simple, fair and transparent. In particular, communicate to your employees the expected timeline for being expensed – this will take away some of the understandable emotion around the subject.
7. Reduce the risks
When processing employee expenses, there are plenty of risks to take into account.
One of your colleagues may lose a receipt. Another may be requesting money back for something that doesn’t even count as a business expense.
It’s hard to avoid these risks in their entirety, but there are small steps you can take to reduce the risk. By using dedicated bank accounts, communicating a list of authorised vendors, automating your processes, and using an accounting software (such as Xero) to manage your receipts, you can avoid troublesome problems.
8. Automate, automate, automate
Okay. So, we may be a little biased here (automation is sort of our jam at Turbine).
But automating your expense management process will save you time, money and confusion. We promise.
Here are some incredible benefits of expense management automation:
- Automation completely cuts the need for paper forms. This means you’ll cut costs on printing, reduce the likelihood of losing forms, and do your bit to better the environment.
- You save time (and money). Bureaucracy isn’t time efficient and, as the files mount up, you could be spending more than you’d like to on stationery and printing. By taking your expense management online, you’ll complete your processes in a timely manner.
- Peace of mind. When a paper form is sent off for approval, its fate is uncertain. By tracking expenses online, employees can rest assured that their requests have been approved or are pending.
- You can better your budgeting. By having a complete overview of your employee-focused expenses, your HR department can better predict expenses.
So, what do you think?
Are you ready to scrap the endless spreadsheets and paper forms and embrace the extraordinary world of digital expense management?