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Many companies carry out projects at the client's site: a team of experts travels to one of the client's sites, either nationally or abroad, and stays there for several days or weeks - even up to several months - to work on a project.
These could be IT or business consultants who overhaul IT systems or conduct interviews at client sites. Or a specialised events team travelling to festival venues to set up and dismantle the increasingly complex lighting and sound systems for such events.
Another example is technicians who travel to their company's customer sites to install specific components, such as connectors for industrial pumps, or entire sections of a new building, such as special flooring in museums. Often, the technicians stay longer to check initial use and monitor whether everything is working properly.
As diverse as the occupations and tasks may be, from a financial point of view these projects share some common features: project expenditure peaks during these periods, as employees have to pay for hotel accommodation, meals, travel and specific equipment. Often, such projects can also lead to big surprises in costs.
Problems may require renting equipment for a much longer period or require a well-paid consultant to fly back and forth between sites.
The most common challenges for project-based spending
❯ Resource availability
Cash advances are usually not suitable for longer projects because of the associated risks and handling of foreign currencies, so credit cards are often used to circumvent them.
But credit cards have their limits. With some unforeseen expenses, the credit limit can be reached quickly. It can be a painful experience to renegotiate these with the bank and to do so quickly so that employees on site do not lose time.
❯ Timely insight into costs
To avoid dramatic budget overruns, it is vital to keep track of project costs. Because credit card statements come in only once a month, they cannot provide the precise control that financial managers expect.
And because the travelling team often has something else to do besides daily cost reporting, the full insight is only available when the team returns . If they don't fly straight to their next project...
❯ Correct allocation of costs
The finance department needs receipts and clear justification of expenses for proper allocation of costs. When employees are on the road, they can easily lose receipts or the overview of expense claims. This makes it difficult to check and allocate expenses to the right cost centres.
If the expenditure has to be billed to the customer, this becomes a challenge and uncertainty about expenditure can also affect future project bids and hence the competitive position.
Does this sound familiar? If so, you may have already started looking for ways to solve the dilemmas of project costs and staff-friendly expenses.
Many companies are replacing cash with credit cards, but the demand for budgeting and control remains. Lack of real-time visibility can thus turn promising projects into loss-making ventures.
What you can do to improve project cost management
In a word: digitisation. Specifically, you can explore the following options and implement one or all of these steps:
❯ Digitise payment methods of employees on site for better insight into transactions. Some credit card providers already offer a service with periodic or digital statements.
❯ digitise the claims process. This makes it easier for employees to submit receipts directly and add justifications and cost types immediately. The finance department is then quickly aware of expenses. Several claims software solutions offer this feature and some even integrate well with your accounting system.
On-site projects: start today
Depending on how often these problems occur, you can first analyse which aspect is most important to you. On the internet, you can easily find information on digitising payments and/or declarations. Or register with us to receive more useful tips.
For a faster solution, contact us and tell us about your problem. SimpledCard is uniquely positioned to provide support for both payment and expense streams. We have already helped many organisations solve their problems around project expenses.
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