Expense Management Tips
The human body is a miracle. Millions of cells and organs work together for a single purpose – keeping you alive. A business is no different. In a company, every aspect of the business must be well-integrated and work in tandem to create miracles.
One of these crucial aspects is expense management, a vital function that all CFOs must pay great attention to. That is because if you do not adequately take care of the expenses in your organisation, your firm can start leaking money, which can affect the company’s financial health. Here are ten expense management tips to improve and make the process efficient in your firm.
What Is Expense Management?
There’s a common misconception that expense management is just about employee expense reimbursement. But in reality, expense management is the process of tracking employee spending, implementing expense policies, auditing, and reimbursing employees in an organisation. Expense management also includes setting up expense policies and using spending data to make better decisions.
Why Is Expense Management Important?
After salary, employee expense is the second biggest spend in most organisations, and it usually takes about 10% of a company’s expenses.
That is why business organisations must pay great attention to employee expenses and reimbursement. When rightly done, expense management can positively impact your business’s financial performance and help improve your firm’s bottom line.
Read more – The Ultimate Guide to Expense Management
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10 Best Expense Management Tips for Your Business
Managing expenses effectively is one of the most significant responsibilities of CFOs. We know that every simple help or tip can make your job easier. Here are ten expense management tips that we think can help you make the expense management process hassle-free in your organisation:
1. Go Paperless
If you are one of those firms still relying on paper and spreadsheets to manage expenses, then it is high time you ditch that practice. That is because the usage of paper in this process is a hassle for everyone involved in this process.
Allow us to explain in detail. For the employees, they have to save every single piece of bill, paper receipt and invoice every single time they travel. Unfortunately, this is not the only problem; there’s more to it. Once they return from the trip, the travellers must complete a ton of paperwork.
The managers must go through all the expense reports, approve them, and forward them to the finance team. This can take considerable time, which they could have invested in other important things.
Now arrives the plight of the accounting team. For reimbursement, your firm’s finance team has to manually go through all the expense reports filed by the employees and check for compliance. This is a humongous and time-consuming task, and the chances of non-policy-compliant tasks getting approved are very high.
An integrated expense management software like Happay, can help bring all expense management processes under one roof.
Read more – 5 Easy Steps to Paperless Expense Filing
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2. Set Up An Expense Management Policy
Looking to eliminate expense fraud and cash leakage in your organisation completely? Then setting up and implementing an expense policy is the way to go. Develop an expense management policy and implement it company-wide. In the expense policy state all the expenses your firm will cover and does not cover them in detail.
3. Issue Corporate Credit Cards
Corporate credit cards come with multiple advantages for organisations. Firstly, there’s no need for employees to go through the gruelling expense reporting and reimbursement process. Secondly, monitoring cash and tracking expenses is a breeze with corporate credit cards.
What’s more, companies can load cash, set spending limits, and activate or deactivate cards with a single click.
4. Make Expense Reporting and Tracking Easy
Introduce tools and features that simplify the expense reporting process and make it hassle-free for your employees. One such feature is optical character recognition (OCR), which is found in most expense management software, that allows employees to file expenses in real-time from anywhere, anytime.
5. Audit Regularly
You need to audit expenses regularly to find fraudulent claims and expense fraud in your organisation. Regular audits can help you find anomalies before they become irreparable serious issues.
6. Review Expenses Regularly
Regularly reviewing your expenses can help you keep tracking them better. Also, this way, you can make sure you spend money on only necessary things.
7. Make Sure Your Employees Follow the Best Practices
Ideally, every employee in your company should be familiar with the expense management process and policies. Educate them about expense reporting, tracking and reimbursement processes. Cost-conscious employees can help control expenses, which can benefit your firm’s financial health.
8. Encourage Transparency
Create a work culture in your organisation that encourages transparency and equality. Also, have a mechanism in place where employees, managers, finance department staff and all stakeholders involved can provide feedback to improve the expense management process.
9. Negotiate Better Rates
Business travel, over time, can cost your company a ton of money. That is why the smartest thing to do would be to negotiate better-reduced rates with vendors whose services you often use. Talk with the vendor, and show him the expense data that explains how much you pay him. Use this information to leverage and negotiate better rates.
10. Implement An Expense Management Software
Using expense management solutions like Happay, you can now make the entire process simple and error-free. From expense reporting and auditing to reimbursement, expense management systems can automate the process and make it more efficient. However, no expense management software offers the same level of efficiency and customisation. Analyse the pros and cons of all the options available, and finally, pick one that suits your budget and company.
Also Read: Expense Management Workflow
Make Expense Management Easy With Happay
Happay is an integrated expense management system that can help manage your travel and expense under one platform. Here are some of the unique features of Happay that can help save time and money for your organisation:
1. Using Happay’s superior OCR technology, your employees can now auto scan bills and expense receipts on the go using the app. The OCR feature can capture important data like invoice number, vendor details, items, amount, date, GSTIN, etc.
2. With Happay’s AI Engine XPENDITE, you can auto-capture expense data from multiple sources like SMS, credit card statements, UBER, Gmail, Outlook, WhatsApp, and other apps with full accuracy.
3. Happay can help configure all business rules and expense policies into the system seamlessly. Happay’s SMART AUDIT feature can help you catch duplicate bills, amount mismatch errors, date mismatch, over stated expenses and auto flag restricted items.
4. It can trigger the right deviation workflow for non-policy compliant approvals. What’s more, it will also notify approvers of expense reports within seconds after submission. You can now handle multiple levels of hierarchy easily.
5. Employees can now create expense report in just a single click – no emails and no excel sheets.
6. Approve expense claims on the go using the mobile app, anywhere, anytime. Since the system auto flags policy violations and invoices are auto matched with the claims, approvals becomes easy.
7. Happay’s Smart Analytics gives you complete visibility of travel and expense on the same platform. This feature can provide detailed reports to analyse spending, policy violations, compliance adherence and efficiency details.
Want to know more about Happay and the amazing features it offers? Schedule a demo with us now.
Expense Management Tips – FAQs
1. How do you manage your expenses effectively?
If you are a large enterprise, you can manage your firm’s expenses effectively by automating the process using expense management software like Happay.
2. How can I make an expense report easier?
To make expense management more efficient, you must first make the expense reporting process more accessible. Here are four ways you can do it:
- Use expense management tools
- Make the process mobile-friendly
- Set up clear expense approval workflows
- Find non-compliance reports at submission
3. What is an expense management system?
The expense management is a system that companies use for receiving expense claims, tracking expense reports and reimbursement.
4. Why is expense management important?
Expense management is crucial for companies to ensure that employees are not spending too much and they are complying with the firm’s expense policies and regulations.