Manage employee’s expenses is considered the most ineffective and least important in financial performance. However, nowadays, it becomes one of the leading topics in corporate governance, especially in time of economic hardship.In addition, recent legislation also specifically mentions employee expenses for the accounting department (and the reasons for that expense).
Therefore, keeping accurate and detailed reports becomes more important. This makes the accountants result simpler, and tax obligations are clearly made.
To ensure this, the company needs accurate bookkeeping and an excellent expenditure management system to support.
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The article below lists the five most useful and important ways that you can use to ensure your company’s money is used correctly.
1. Apply the policy thoroughly
Never assign decisions to approve expenditures for management or for finance department.
The reason is that they will inevitably ask questions about their spending requirements in order to avoid creating disagreements, especially with their bosses or annoying colleagues.
A cost management software will prevent employees from spending company’s policy violations or from tax authorities. Learn more about cost management software.
The prohibition of certain revenues and expenditures is totally inappropriate, instead, we need to send employees a warning.
For example, the reception fee will be at a certain level and will be alerted to the employees through the automatic system. There are many automatic systems, one of the best is smart expense report.
2. Provision of work progress
Make sure the requirements for expenditure are correct in the type of expenditure, project, or value.
The system must be able to handle higher spending management requirements, once this exceeds the allowable limit or violates regulations.
In addition, the consent of the project manager or treasurer for certain expenditures is required.
For example, spending less than $1000 is considered by direct management, spending over $1000 will be transferred to the Chief Financial Officer and may decide to over $5000.
Specific fees that may be required for an individual’s personal signature before approval, such as a medical examination fee, are transferred to the Human Resources department.
3. Collect all expense data
One of the most common issues facing with employees when they ask for reimbursement is that some necessary information cannot be entered into the system. This is because of using manual systems rather than automated systems.
A typical example is ‘guest reception’. It is important to report the number of attendees present at the reception. This is useful for accountants because they will calculate the percentage of customers and employees reasonably.
4. Export expense data
Employees who see the details of their expenditures, are analyzed based on the type of expenditure, customer, project, etc., will have a clear impact on employees.
It is not wrong to spend money to pursue a prospect or take care of a customer.
However, letting employees and managers see what they will spend is well documented will help ensure that people see the real cost of finding and caring for customers.
Note: Most of the process of collect, analyze and export data may cost you lots of money and efforts.
And, most of the employees feeling uncomfortable by being asked about what they expenses as well as employer with lots of on hand jobs.
5. Simple operation
Systems with high levels of tuning will easily be a headache for engineers and will make it difficult for users because of their complexity and lack of user friendliness.
Employees only need to fill in a few items in the request form, and the system needs to be able to reference the data and analyze them to help them complete them.
Manage employee’s expenses is not a problem, but the sooner they are resolved, the better the productivity of the company.
The most important thing is that the company needs to look at its business characteristics to choose the right management solution.
Thus, we should consider about the application of the five methods to achieve maximum efficiency. You can try Smart Expense Report with Free Trial 14 days.