Expense management checklist
Expense management is a vital part of any organisation. Businesses need a fully transparent expense report process to always be on top of employee spending. Employees on the other hand want to be reimbursed quickly and effortlessly, so they can focus on their core jobs.
Your expense management solution should enable your organisation to reach both goals. However, if it fails to ensure an efficient, transparent, and compliant expense reporting process, your current process is wasting your organisation’s resources. In that case you should think about replacing it with a system that does fulfil your needs. This checklist summarizes the signs that your expense management system is a money-drain.
1. Your current process is manual
If you rely on manual processes to manage business expenses, you should consider automated alternatives. Asking employees to save receipts, scan them, fill out printed or digital forms, and copying these forms into the financial software becomes problematic as the organisation grows. Large organisations that have to process many expense sheets might not have real-time insights into their current spend because not all expense reports are processed yet. This can severely impact accurate reporting and may even affect decision-making at a higher level.
2. Insufficient data availability
Aberdeen Group has estimated that about 10% of company spend is spent on business expenses. It can be the largest cost a business faces after salaries. But how many businesses know how much is spent on hotels, and what the average accommodation price is? Using an automated and cloud-based expense reporting solution will give you these insights. Relying on sheets instead of expense reporting software usually means that these answers are unobtainable. If you were to have this kind of knowledge, you would be able to control costs and negotiate with vendors more effectively.
3. Late expense reports that contain many expenses
If reporting business expenses is time-consuming and painful for employees, they will postpone it as long as possible. This means that at the end of the month or quarter, the finance department will be overflown with expenses. Having to process them quickly increases the chance of mistakes and presents a distorted picture of your cash position earlier in the expense report period. By giving employees an expenses app to quickly capture and submit expenses, you can prevent this from happening. You will be able to see the expenses from the moment the picture is taken. No need to guess anymore.
4. Employees do not adhere to the expense policy
Controlling business expenses starts with an expense policy. The policy probably includes rules like the type of expenses certain job roles can report and the maximum amount they are allowed to report. Certainly it will policy is important to streamline the process and to prevent expense fraud. But is everyone aware of the rules, and do they live up to them? If expenses often have to be rejected because they are not policy compliant, you have to think about expense reporting software. In these solutions, you can setup workflows and business rules to make sure everyone adheres to your policies.
5. Many missing receipts
Do you often receive expense reports in which receipts are missing? This might be the most obvious sign that your expense reporting system needs replacement. Having receipts is of the utmost importance to ensure that all expenses are justified. After all, more or less allowing expenses to be submitted without a receipt makes your business prone to expense fraud. Missing receipts can seriously hurt your company when it causes problems for audits. Think for example about the possible fines from the tax authorities and the damage on the company's reputation if the media finds out.
6. No foreign VAT reclaim over business expenses
If your employees travel internationally, there is one last reason why your current expense reporting system can be a money-drain. By not submitting foreign expenses for vat reclaim, you are depriving your organisation to reap the benefits from international tax regulations. When relying on an expense management system that is not in the cloud, it will probably be too time consuming to go through all foreign expenses and find out what laws are applicable to it. Switching to an expense reporting solution with a foreign vat reclaim integration will make it as easy as one click to get all the money your organisation is entitled to.
Business expense management doesn't have to be painful. SRXP offers an expense management solution that automates the expense reporting process. Finance teams can free up their time to focus on other duties, and expense reporters and managers can focus on their core jobs. To find out more about how you can stop the money-drain that your current expense reporting process causes, visit our website or schedule a demo.
