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Managing Employee Expenses

Managing Employee Expenses

Managing Employee Expenses

Posted: 14/06/2022

Whilst all employees want to be quickly reimbursed for the money spent during business trips and meetings, business owners want a way of efficiently controlling and managing employee expenses. 

Employee expenses relate to all the costs incurred from any work related activity such as travel to meetings, uniform for an event, petrol for a work vehicle or additional hardware required to work at home.  Rules around what can and can't be bought, along with spending limits will differ from business to business.

Implement An Expenses Policy

To begin efficiently managing employee expenses, organisations should have an expenses policy in place.  This is a set of rules that outline what employees can and can't spend with company money. 

The policy should offer a detailed explanation of what qualifies as an expense, how much can be spent, any limits, how to claim money back and what will happen in the event of any dispute.

Without a policy in place or if rules are unclear, employees could spend too much or make unnecessary purchases.  Fraud can also be a big problem when private purchases can be made with company money.

What is an Expense Process?

Once expenses have been incurred, staff will need to provide evidence for every item purchased in the form of receipts and invoices.  For mileage claims, an understanding of where they have travelled to and from and for what purpose will be required.  This information will often be needed whether an employee has a company credit card or not.

Alongside itemised receipts, an expense form has to be completed detailing the reason for each purchase.  This information is vital as it tells finance teams what part of the business the cost needs to be attributed to and what budget it may need to come from.  For example, if it's an extension cable bought for a networking event, it needs to come from the marketing budget, or if it's accommodation while out on site, it will go against a specific project costs.

Managing employee expenses and the administration created is one of the most time consuming and labour intensive jobs office workers face, and I'm sure any PA, Office Manager or Finance Administrator will agree. 

It's frequently the job staff leave to the last minute or complete once the deadline has passed.  This causes difficulty for those trying to balance the books and when trying to claim qualifying business expense taxes from HM Revenue and Customs.

Finance teams are often left chasing staff which can cause tension, and the longer expenses are left incomplete, the more likely that receipts are lost and staff will struggle to recall their movements of the previous months. 

The Problems with Manual Expense Processes

Manual and paper based expense processes create huge volumes of work; collecting receipts then in turn scanning, filing and processing them.  They also create high levels of data entry; the employee making the claim will need to complete a spreadsheet and then finance staff copy this into a finance system.  

Errors

Complicated and time consuming expense processes lead to errors and longer overall processing times.  Worse still, a lack of clear guidelines can lead to missing information as well as an increased risk of fraud.

Problems Obtaining Approvals

Paper based processes make obtaining approvals more difficult than they need to be, having to wait until the approver is physically present.  There can be no clear overview of the entire process for management to check when expenses haven't yet been filed as they're sat on a desk waiting for approval.

Delayed Audits

Expense audits will check how closely payments align with internal policy and will require documentation such as invoices and receipts to be checked.  This will take longer if there are piles of paperwork that need to be located across desks and filing cabinets, or worse still, lost.

Digital Expense Management

With our partners at JobRouter we can provide a simple, digital system to manage employee expenses.  All expense information is digitally recorded and accessible to authorised users, with rules put in place to avoid any ambiguity or overspend.

An online dashboard is available to all employees and departments involved in the expense process, such as the individual, line manger, HR or members of the Finance Department.

All expense information from across the organisation is captured centrally in one place, removing the need for multiple employee spreadsheets.

Columns can be customised to meet individual business requirements and the system will work out calculations, currency conversions as well as split money across various cost centres as required.

Invoices and receipts are captured digitally, uploaded into the system and attached to expense line items.  A photo of a receipt can be taken the moment the expense occurs, removing the need to keep paper receipts.

Not only is this more efficient and removes the risk of errors occurring, it is also more convenient for employees.  The system can be accessed on different devices and from anywhere with an internet connection. 

When an expense form is submitted, the system will perform its own validation against parameters set by your organisation – such as no lunch expense should total more than £10.  Additionally, managers can approve or decline expenses before the claim is sent to finance.

It's the perfect solution for organisations trying to embrace digital transformation, reduce paper and work more cost effectively.

The Benefits of Managing Employee Expenses Digitally

Streamlining and digitising the employee expense process offers a number of benefits and will remove some of the friction caused at the end of each month when the expense deadline looms.

  • Save time and reduce daily administration both for an individual employee and finance teams
  • Reduce paperwork, physical storage and associated costs
  • Eliminate the chance of over spend or fraud
  • Assists finance with budgeting
  • Increases security and compliance 
  • Data can be fed directly into HR or Finance systems
  • Reduces manual data entry
  • Creates transparency 
  • Assists with audits

Managing employee expenses no longer needs to be a time consuming paper driven process.  Digitise the expense process and reduce errors, increase security and save money.  

We'd love to help your organisation improve, we'll listen to the challenges you face, explain how our solutions work and offer a free demo. 

Get in touch on 0161 647 7040 or book some time in with a member of our team.