How to Cut Costs with Employee Expense Management Software
Published: 13/04/2019
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Ineffective management of employee expenses leads to financial losses, while effective practices enable cost reduction. In this piece, we aim to inform founders and operations directors about the best methods for tracking employee expenditures. If you're seeking ways to reduce losses and increase revenue, this blog post is for you.
As an employer, you might completely trust your team when it comes to claiming back money from you. However, lacking a proper expense policy or process makes you more susceptible to mistakes – such as losing receipts, frustrating your team by reimbursing them late, or overpaying employees. These errors could ultimately cost your business.
If you’re realising that your management of employee expenses could use some fine-tuning, we are here to lend you a hand.
Employee expense management refers to the process of reviewing and approving staff expenses. It also provides a comprehensive overview of expense submissions over specific time periods, allowing for further investigation into individual cases.
It is most effective when carried out using designated software, as it offers quick access to data through 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 discuss how you can perfect employee expense management in your strategy.
Many employees report that they tend to make mistakes when claiming expenses. An astonishing majority also admitted to avoiding it altogether. They attribute this to the unclear nature of the expense claim process. Next, we will guide you through the steps to take in order to avoid such an outcome by providing clarity.
When it comes to your expense policy, transparency is key. If you haven’t already, gather your team and discuss your expense and purchase policies openly. Ensure that any new recruits joining you are also brought up to speed.
You should create a policy document and make it accessible to everyone. It needs to be comprehensive yet easy to read and understand. Explaining the conditions in simple terms will prevent staff from frequently asking you claim-related questions, thereby saving you time. We strongly recommend adopting an employee onboarding platform that includes the policy and requires new hires to e-sign it.
Of course, you don’t want your business to incur expenses. However, you shouldn’t expect your team to personally cover work-related costs. If they need to spend money for work, they must be reimbursed.
Spending money often leads to long-term gains. Consider a sales executive who treats a prospect to lunch in hopes of securing them as a long-term client. Or think about an employee who enrolls in a two-week course to enhance their skills, which are vital to their company's success.
It may not be feasible for your business to offer such benefits, but the key point is that every company should value and respect the expense claim process.
You need to modernise your approach if you still rely on time-consuming manual processes for managing expenses. Simply put, it causes you to bleed money, and you can’t afford that. The good news is that there are a few things you can do to fix this.
The fewer bottlenecks there are along the way, the easier it will be for your staff to follow the process. For instance, consider adopting a digital approach instead of having your staff fill out paper forms. To save you or your HR hours spent signing them off manually, use online tools to facilitate your efforts.
Tools accessible via an internet browser (cloud solutions) and/or those with a designated app can help address the common issue of lost receipts. These solutions allow workers to upload receipts to a digital platform by simply taking a picture, thanks to their accessibility. This prevents the loss of receipts from the time they are issued until they are submitted as part of the expense claim.
Automating certain steps can simplify and streamline the process. For example, consider auto-filling sections of expense claims with recurring information, such as the worker’s name, bank details, signature, or other static elements.
Regarding the processes on the approving end, you can establish automated notifications and reminders for expense claim approvals. For instance, once the employee submits an expense, the approver will receive a notification via email or SMS, allowing them to review the claim immediately.
You may have grasped the general idea of what we are suggesting by now. To simplify expense-related operations and enhance employee expense management, you need to implement an online expense tracking solution. The automation features and functionality may vary from one software to another, but there is one key factor you should watch for.
The essence of a smooth, straightforward, and swift employee expense submission and reimbursement process lies in centralised document storage. This is where you can find and access expense submissions, receipts, and statements uploaded by your staff for detailed analysis.
We provide a centralised expense management module that includes several benefits. It is designed to help you tailor the process to your preferences and the nature of your business. The advantages include a mileage calculator, a global tax calculator, a currency converter, and a flexible expense approval process. These features, along with others, will assist you in establishing a steady workflow.
By optimising the process of expense submission and reimbursement, you will not only prevent billions of pounds in losses but also likely enhance ROI. Key areas to focus on include clarity and simplicity. Reduced friction and clear boundaries will encourage your staff to use the company’s funds to enhance business operations.
Achieving this can be done by incorporating a centralised expense management system into your strategy. This system will also provide complete visibility into employee spending. Moreover, it offers enhanced accessibility, a simpler approval process, and long-term benefits.
Are you ready to simplify your expense management? Let us know.