How To Simplify Expense Management
Are you spending hours upon hours at the end of the month going through your employee expenses? Do you give them a per diem or a company credit card? Are they buying items for work purposes on their own and wanting to be reimbursed?
Going through receipts, approving purchases, reconciling credit cards at the end of the month and anything else that goes into expense management can be a daunting, tedious task, and let’s face it- it’s probably one thing you would not do if you didn’t have to.
Thankfully, there are ways for you to simplify your expense management procedures, which you’ll learn about in this blog.
Expense Management Defined
Rather than jumping into exactly how to manage expenses, let’s first start off with what exactly expense management is.
Expense management is the process of managing expense reports, purchase approvals, and reimbursements for employee-initiated expenses. There are many moving parts to expense management. This can make it extremely frustrating, time-consuming, and creates room for errors if not done properly.
The Importance of Expense Management
Expense management has always been an important process for a business. Whether you have employees working from home or traveling (in non-pandemic times), it is important to monitor and audit their expenditures. It is also vital that you reimburse your employees in a timely manner, which is why it is pertinent to review purchases frequently.
If you utilize company credit cards, you want to ensure that all purchases made on that card are legitimate purchases for the company. If your employees are paying for items they need for work, it’s your job to confirm that such expenses are actually related to them doing their job.
Yes, all of this sounds like a lot of work and has room for errors to be made, but fear not, the Redmond Accounting Team is here with tips to simplify this process!
How to Simplify the Process
Approved and Non-Approved Purchases
One easy way to improve your expense management is by having an approved and non-approved purchase list. Your employees don’t need to be buying supplies if you already have these items at their disposal. Set clear expectations of what is an approved purchase and what is not an approved purchase.
Per Diem for Traveling
If you have employees that travel for work, you can place a per diem on how much they can spend per day while outside the office (taxis, Uber rides, meals, airfare, hotel rooms, and so forth). This way you can limit what they purchase but still allow them to get what they need. At the end of the month, they will have to explain these purchases, but while they are making purchases, they know what limits they need to stick within.
This can help to reduce the amount of non-approved purchases made, put a stop to unnecessary spending, and save your company money in the long run.
Utilize Technology
Smartphones are in everyone’s hands these days. Utilize technology to simplify your expense management process by integrating a software system that works in conjunction with your employees’ phones. There are different software programs available to manage your expenses. However, here at Redmond, we recommend using Expensify.
Expensify
Expensify offers an easy way for your employees and company to reduce manual entry by using Smartscan on their smartphones. With Smartcan, employees can snap a photo of their receipt. From there, the software creates the expense automatically with the merchant, date and amount already filled in. No longer will your employees search for crumpled receipts or be stuck calling a company to request another copy of one. They’ll have instant access anytime with the Expensify app.
Additionally, with Expensify, employees will be able to review their purchases to see if they are approved expenses before they buy. This cuts down on the confusion of going back and forth to figure out if a purchase is allowed. Remember how we mentioned the importance of having an approved and non-approved purchase list? This is where employers approved and non-approved lists and protocols come into play!
Furthermore, Expensify allows you to track and pull mileage reports, reimburse employees, create multi level approval workflows, and more. Having this type of technology right at your fingertips will save you time, money, reduce error and increase productivity.
Work Smarter, Save Money, Increase Productivity
Whether you’re looking to have a simplified expense management process or gain better control over expenses management, a simplified expense management process is key to doing so.
Ask your accountant or bookkeeper about this process and see if they offer a service to help you with it. If you don’t have an accountant, our previous article details the differences between virtual accounting vs traditional accounting, which can give you insight into which type of accounting professional will work best for your business.
And if you need help with expense management, contact us today. At Redmond Accounting, we’re not just accountants, we’re also accounting technology experts that are ready to help.
