Expense management is crucial for day-to-day business operations. A complex management process can consume a significant amount of valuable time and cost your organization money. It’s essential to streamline your processes and ensure your employees focus on vital tasks that lead to business growth.
Effective ways to streamline the expense management process
1. Bring all employees on board and don’t micromanage
Every employee in your organization should understand and abide by the established processes to manage expenses. Studies show that at least 6% of employees are oblivious of the company’s expenses policy, 10% don’t know they can claim reimbursements, and 25% often avoid client meetings since they don’t understand the payment process. This makes managers spend more time monitoring the process. Your employees can contribute to a seamless accounting flow with the proper training and tools.
However, the process should be clear and straightforward, such that it works without any supervision. You can achieve business efficiency by establishing expense-guiding policies to implement rules that facilitate intuitive flow across the company. This eliminates complex mechanisms that put unnecessary strain on employees. Nevertheless, managers still have visibility and control over employee spending.
2. Automate your expense management processes
Despite technological advancements, some businesses still process their expenses manually. And while automation doesn’t eliminate all expense-related issues, organizations that are yet to adopt digital tools to handle repetitive tasks are missing out on a unique opportunity to gain a competitive edge.
Typically, automated expense management tools eliminate paperwork, reduce human error, and offer real-time data. Most importantly, reducing the time spent dealing with bureaucracies can save time and money. Modern automated solutions allow you to integrate business spending policies to make your expense management process seamless, and this means items like reimbursement policies are automatically implemented in your system.
Any operation that doesn’t comply with company guidelines can be flagged for timely reconciliation. In addition, implementing appropriate automation tools and policies reduces the chances of spending beyond your budget allocations.
3. Review your processes and expenses regularly
Unlike other business processes, expense management is not a “set and forget” affair. The accounting department can review business spending through consistent and regular audits to identify issues like fraudulent receipts or overspending and adjust organizational spending policies. Since occasional overspending from several employees can add up, regular audits and reviews can help detect abnormalities before they develop into serious financial issues.
While expense reviews can be daunting, there is no point in waiting until the end of a financial year. If you wait too long, you might discover a recurrent expense that shouldn’t have happened when it’s too late. Ideally, the audit should countercheck each transaction to determine whether they are allowable. In addition, try to figure out if any expense categories are bloating your budget unnecessarily.
Endnote
The overall success of your company depends on how well you manage your expenses. Regardless of your industry, establishing robust expense management strategies and integrating efficient tools can be rewarding to your business. Most importantly, streamlining your expense management process enhances employee productivity and improves your bottom line.
