Many companies carry out projects at the client’s site: a team of experts travels to one of the client’s locations, nationally or abroad, and spends several days or weeks – even up to several months – to work on a project?
This can be IT or business consultants overhauling the IT systems or carrying out interviews at the client’s location. Or a specialist event crew travelling to festival locations, spending several weeks mounting and dismantling the ever more complex light and sound systems for such events.
Another example is technicians who travel to the site of their company’s clients in order to install technical parts, such as connectors for industrial pumps, or whole parts of a new building, such as the flooring in museums, for example. Often the technicians stay longer for monitoring the first use and checking if everything functions as intended.
As diverse as professions and tasks may be, from a finance perspective these projects have several commonalities: project expenditures peak during these periods as employees have to pay for hotel stays, meals and travelling as well as specific equipment. Often projects may also cause bad surprises in terms of cost.
When issues arise, equipment may have to be rented for a longer period of time or a high-paid consultant has to fly back and forth between locations.
The most common challenges financial teams are confronted with for project-based expenses:
❯ The availability of funds:
Cash advances are usually unsuitable for longer projects, due to the connected risks and handling of foreign currencies, so credit cards are often used to evade these.
But credit cards have their limits: in case of several unforeseen expenses, the credit limit can easily be reached. Trying to renegotiate these with the bank and to do this time so that employees on location do not lose time, can be a painful experience.
❯ Timely insight into expenses:
To prevent dramatic budget overruns, it is vital to keep an overview of the project expenses. As credit card statements only come in once a month, they cannot offer the close-knit inspection that finance managers expect.
As the travelling team has other things to do than daily cost reporting, the full insight only becomes available upon return of the team. That is when they are not flying out to their next project.
❯ Correct allocation of costs:
The financial department needs receipts and proper justifications of the expenses for the correct allocation of costs. As employees travel they can easily lose receipts or lose track of the expense reasons which makes it difficult to check and allocate to the right cost types.
When the expenditures have to be invoiced to the client, this then becomes a challenge and uncertainty on spend may also influence future project quotes and thus competitiveness.
Does this sound familiar? Then you might have been looking for options to solve the dilemmas of project costs and employee-friendly expenses. Many companies replace cash with credit cards while the issue of budgeting and control remains. Lack of real-time insight may turn many a promising project into a loss-giving venture.
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What you could do to improve the management of project expenses
In one word: digitisation. Specifically, you may want to research the options and do one or all of the following steps:
❯ digitise the payment methods by employees-on-location for a timelier insight in the transactions. Some suppliers of credit cards already offer this service of intermittent or digital statements.
❯ digitise the declaration process. This makes it easier for employees to submit receipts right away and add justifications and cost types. The financial department then is quickly updated on expenses. Various software for declarations provide this feature and some even integrate with various bookkeeping systems.
Start today to organize your project costs
Depending on how often these problems occur, start by analysing which aspect is the most important for you. You can easily learn more about digitisation of payments and/or declarations on the internet. Or simply register with us to get more helpful tips.
For a quicker solution, feel free to contact us and tell us about your problem. SimpledCard is uniquely positioned to offer help with both payment and declaration workflows. We already helped many organisations solve their problems around project expenses.