Expense management: find the balance between financial control and flexibility

Keeping a grip on business expenses while giving colleagues more flexibility in their spending? Sounds contradictory, but it really can be done. That is, if you have your expense management in order.
Expense management (also known as expense management) is the art of structuring, simplifying and easing business expense management.
Not necessarily very exciting, but much needed if you want to keep control over expenses. The beauty: if the basics are right, the rest goes (almost) by itself.
❯  Getting a grip on spending more complicated than you think
❯  This is why you can't do without expense management
❯  Improve the foundation under your spending management
❯  Expense management to the next level

Getting a grip on spending more complicated than you think

Business expense management is all about expenses and spending by colleagues. About recurrent depreciation and occasional purchases. Changing budgets and different responsibilities. Large sums and small amounts.
It touches on everything (besides the standard operational costs) needed to keep your organisation running and moving forward. From travel expenses to meal allowances and office supplies to software subscriptions.
Expense management is about forecasting, anticipating and reacting quickly. Defining who gets to spend what, on what and why.
A key challenge in this complex process? Creating handholds. For colleagues who make business expenditures, and those who control them.
What are common business expenses of employees?
❯ Office supplies
❯ Travel costs
❯ Meals
❯ Accommodation and hotels
❯ Advertising and marketing campaigns
❯ Small gifts
❯ Subscriptions, etc.
Employee commuting is generally considered a private matter.

This is why you can't do without expense management

Traditionally, business expense management has revolved around the tension between control (a goal of your finance department) and freedom (the desire of employees to make business expenditures).
Of course, some tension is healthy. It's how you keep each other on your toes. But it's important to find the right balance.
Because on the one hand, a hand on the purse strings can inhibit the development of your organisation. On the other hand, employees are sometimes too forward with business expenses.
This can lead to hassles around reimbursements, disagreements over claims or annoying budget issues. And that is the last thing you want.
So that's why it makes sense to take your expense management to the next level.

Improve the foundation under your spending management

There are plenty of ways to get a grip on corporate spending. Yet many organisations do not succeed (yet). The biggest culprit? Lack of clarity. So invest in a better foundation.

Ensure clear policies

Do your colleagues, teams and/or departments know exactly how much they can spend, on what, in which cases and from whom they need approval (if any)?
Few people will immediately warm to a foolproof spending policy, but it is oh so important to set limits and avoid grey areas.
Make sure (all) budgets are easy to handle, and based on the organisation's spending habits and liquidity.
For example, record which employees can claim which types of expenses. And, what maximum amounts apply for this per day, week or month. For example: no more than 50 euros per employee per month for a business meal.
You can also set conditions on which payment methods they may use, what types of receipts or invoices you accept and what cost details are required for a claim.
This clarity helps everyone in your organisation make better decisions and be more conscious about business expenses.

Create central overview and insight

Especially if your organisation is a bit larger, chances are you work with different pots. For IT, marketing and sales, for example.
Are budgets within your organisation set at the beginning of a quarter or year, and is each department or team responsible for its own administration thereafter?
Then chances are your finance department will lose the thread. Because lack of transparency and the right tools makes it virtually impossible to keep track of fragmented spending in real time.
Uniform management processes, full disclosure of expenses and centralisation of expense recording help you gain and maintain control.

Reduce the risk of human error

Almost every organisation has developed some form of expense management. Yours probably does too.
Use your complex Excel sheets, lockers full of physical declarations, recording software, apps or a combination? The more manual processes in it, the greater the likelihood of errors.
Data not properly entered, or misinterpreted. Uploaded too late or adjusted after review.
Making mistakes is human. So automate, streamline, simplify. Anything to avoid inaccuracy and incompleteness.

Expense management to the next level in three steps

1. Digitise expense claims with smart software

Frictionless processes around expense claims are still one of the biggest challenges within expense management for many organisations.
For smooth processing, employees first need to know what they can and cannot claim. Next, they need to submit all receipts on time, through the right channels and with a complete description.
Through this process via a app By automating the app, you speed up the processing process considerably and reduce paper administration. Nice touch: if you link an electronic payment card to the app, payment receipts are automatically assigned to the right transactions.

2. Offer appropriate payment methods

Do you want to best support efficient and secure spending? Then make sure colleagues always have appropriate means of payment.
Cash advances and credit cards are ok, but create unnecessary red tape. You are better off for prepaid debit cards choose. After all, you can easily integrate these into a digital claim process.
For example, automate budget top-ups monthly or quarterly, so cardholders always know exactly what they can spend during that period. Behind the scenes, your finance team has real-time insight into spending.
This allows you to completely replace cash and subtly ensure more control over business payments.

3. Integrate expense management with your accounting programme

To gain even more control over your expense management, you can also create links (e.g. via APIs) between the business expense tool and your accounting programme.
Useful when you use customised cost types, cost centres and VAT rates. Or if you want to be able to automatically assign cost centres to specific projects or customers. Because this way, everything is linked to the right ledger numbers in your accounts.
A central (digital) management system helps you go a long way in controlling payment card allocations, budgets and claim approvals. 
From here, you then have real-time visibility of each employee and team's business expenses. By integrating the system directly with your accounting system, this becomes a conclusive process.    

Contact us about expense management

Wondering how to easily implement SimpledCard within your organisation, so that employees arrange expenses more easily and your finance department quickly gets a grip on expense management?
Our financial experts will be happy to work with you to see which solutions fit your organisation, wishes and ambitions.

Expense management