Control for finance teams and employees

Every organisation has its own expense management strategy. For finance teams, this involves the appropriate level of control over business expenses. To best manage and control these business expenses, you can observe the points below.

Because how do you offer your employees flexibility within the expense management policy, while at the same time ensuring security integrity?

It all starts with a clear expense management policy (also known as expense management policy) for employees. If employees are not fully aware of the expense management policy, it can cause confusion within the organisation.
Employees may, for example, incur too many expenses and subsequently claim reimbursement for the extra costs when they turn out not to be within budget. This can lead to discrepancies in budgeting.

A clear expense management strategy and associated policy documentation ensure that the organisation's budgeting is safeguarded. If a clear expense management policy is in place, employees will often adhere to it.
Before delving deeper into the expense management strategy and policy, it is good to first go through the different types of business expenses of employees.

❯  Expenses incurred by staff
❯  Steps to be taken to control operating expenditure
❯  How does expense management work for remote teams?
❯  Switching to paper-free expense management
❯  Choosing an expense management software

Expenses incurred by staff

Operating expenditure are costs incurred by staff while performing their work. The employee expects the employer to reimburse these business-related costs.
There are many different types of employee business expenses, from lunch to small office supplies. These consist of fixed costs (costs that stay the same) and variable business expenses (costs that can fluctuate).
Costs can vary greatly by company, type of organisation and team structure. Depending on your business model and budgets, there may be ways to save on these costs.

Steps to be taken to control operating expenditure and sound expense management

Managing all employees' business-related expenses can be time-consuming and a hassle for the finance team. Fortunately, there are ways to make the expense claim process less laborious.
Managing employee spending is a matter of clear policy and having the right tools to perform real-time monitoring.

By keeping a close eye on the company's operational costs and streamlining costing properly, you can eliminate much of the time-consuming work.
If you do this the right way, you will be working towards a healthy expense management policy which will help create a watertight process. Follow the following five steps to get you started towards a watertight expense report process.

1.Create an expense reimbursement policy:
Policies are a good way to set expectations and ensure there are no grey areas for employees. The expense management policy determines which payment methods employees can use to pay business expenses.
Set specific conditions on what payment methods can be used, what types of receipts or invoices are accepted and what cost details you need with the claim.

It also shows employees which cost types they can claim (transport, meals, hardware, telecommunications) and which maximum amounts apply (e.g. 50 euros max per employee for a business meal).
Policies apply to everyone in the organisation. A common cause of expense management policy violations is a lack of awareness and understanding. So make sure the policy is easily accessible and readable by everyone.


2. Set a budget for specific expenses, staff and teams:
Set budgets that are easy to handle, based on the organisation's spending habits and liquidity. By providing teams with a maximum budget for each cost type, they can plan activities and keep a close eye on business expenses.
Even if the amounts for expenses such as business trips, hotel stays, restaurants, purchase of equipment or other necessities are not set in stone, it will contribute to a more conscious approach to spending.

When employees are aware of what they can spend, they will also make better business decisions as a team. You can even set budgets specifically for an employee by day, week or month.
 
3. Offer appropriate payment methods:
To support efficient and secure spending, it is important that employees always have an appropriate means of payment at their disposal. Common methods such as cash advances and credit cards can create additional administrative hassle later in your workflow.

One of the best and most appropriate methods is to use prepaid debit cards, as they can be easily integrated into a digital claims process.
With prepaid debit cards, you can automate budget top-ups for each period, so cardholders always know exactly what they can spend that month. In this way, you can replace cash completely and, at the same time, it ensures safer business payments.
 

4. Digitise expense claims with expense management software:
One of the most common bottlenecks within expense management is that employees have to submit all receipts and justifications on time. Traditional paper forms are often time-consuming to process.
Automating this process helps you speed up the processing process, gives teams more flexibility and frees up time for other important tasks.

Instead of having to lug around physical receipts, you can use the benefits of a mobile claims app. When a team member pays for something, he or she can instantly photograph the receipt with such an app.
When the app is linked to the electronic payment card, the receipt is automatically linked to the correct transaction.


5. Integrate expense management with the accounting programme:
Most business expense tracking apps allow you to set customised cost types, cost centres and VAT rates. Use this kind of specialised system for complete control over expenses. These apps automate the allocation of cost centres to a specific project or customer, for example.

In addition, own ledger numbers can be assigned to all transactions. A central management system allows you to control payment card allocations, budgets and claim approvals.
From here, you then have real-time visibility of each employee and team's business expenses.

How does this policy work for remote teams?

Some challenges often arise when organising payments and expenses for remote employees.
If you are still working with cash advances or paper claim forms, there is a chance that homeworkers or travelling employees will not be able to pay or submit necessary expenses on time. Using dedicated business payment cards and expense management software, remote teams can also participate in the same payment and expense claim process wherever they are in the world. Remote employees often incur additional costs to create a mobile working environment.

Examples include internet software subscriptions, a portable Wi-Fi adapter or a second monitor. With prepaid Mastercard cards, employees can easily pay for online business purchases and make hotel reservations, for example.
Expense management automation for remote teams, therefore, need not necessarily be a complex affair. To maintain control, finance teams can easily move to a more streamlined and real-time solution.

When employees incur many small expenses, it is convenient when these are integrated into one payment and claims system.
This is the only way to ensure that all transactions, justifications and their control come together watertight. That way, you can process expenses faster and more securely. Such an all-in-one solution Eric Smeding finds for his team in SimpledCard. 

Switching to paper-free expense management

If your company has not yet switched to digital expense management, the range of expense management software available can be overwhelming. Digitising the expense claims process in the process can save a lot of time for employees.
It also saves a huge amount of paper and thus contributes to more sustainable working. Digital capture of payment receipts and digital submission of claims can drastically reduce the turnaround time between a payment and actual administrative processing.
This gives finance teams real-time insight into business expenses and makes them just one click away from approving and controlling business expenses.

Choosing an expense management software

The expense management software market is growing rapidly and offers numerous functionalities. Many companies have already recognised the benefits of organising and managing business expenses digitally.
However, choosing a business expense management software that suits the company's needs is certainly not easy. SimpledCard helps you digitally manage expense management in three easy steps:

Step 1
First, consider electronic payment cards for all business expenses. Employees can then pay for their hotel, business dinners, online subscriptions and office supplies without having to advance with private money. At the same time, you also get rid of lengthy credit card applications.

Step 2
The next step is to digitise business expenses and receipt recording. Some business expense management solutions allow the digitised receipts to be linked directly to the transaction, making the management of operating costs even more efficient.
Through the SimpledCard mobile claim app, each payment is linked to the receipt and associated expense data and stored securely.

Step 3
Finally, you can set up the process so that all spending can be monitored in real time. One central card management system for business expenses, allows you to control budgets online and apply your own cost structure and approval process.
This method of digital processing guarantees a high level of security and can be seamlessly linked to your ERP or accounting programme.

Get started today with SimpledCard's expense management system. Schedule a no-obligation consultation with one of our experts now and map out together which solution suits your organisation.