Home Business Online Expense Management System | What Best Practices Your Company Should Follow?

Online Expense Management System | What Best Practices Your Company Should Follow?

by Gerua William

As a business owner, for sure you know that employee payroll and benefits are not the only thing you should handle. There is also the travel and entertainment, which is the second-largest controllable expense that you should keep an eye out for. It is something that an employee can use whenever they are on a business trip or making a deal with a client. In short, it is their pocket money that they can spend for business purposes. 

On the other hand, managing this alone takes a lot of time. Not only you would have to balance the paper records and crumpled receipts, but you would also need to input everything into the Excel spreadsheets. Manually doing this is a time-consuming process, whereas it is inevitable for you not to make errors along the way. So, how should you calculate and manage your employees’ travel and entertainment expenses? The answer is through an online expense management system

What Is an Online Expense Management System?

An online expense management system is a software that can simplify all the processes in one. When using it, you can expect that report submission becomes more manageable since there will be less documentation. What is more impressive is that it also reduces human errors and makes the reimbursement process a lot faster.

Why Include an Online Expense Management System?

As mentioned above, this software can simplify the processes. It means that you will be able to track and manage your employees’ travel and entertainment expenses. Here are the advantages you can take advantage of when you include this online expense management system in your business’ operation.

  • Take allowable tax deductions.
    • You can, as long as all documents have the right date and time. With this, you could not only take all allowable tax deduction but also balance your financial report of the IRAS.
  • Plan out more precise budgeting.
    • The travel and entertainment expenses have the second-largest portion of your business’ budget operation. With this, you can track all types of expenses so it would interfere with your budgeting forecasting. 
  • Manage expenditure, even overseas.
    • No matter how much you trust your employees, there is nothing wrong about being too careful. You see, when you include this expense management software to your company, you know who and where they spend it. With that, you can minimise fraud and catch those employees taking advantage of their travel allowance.

Four Expense Management Practices Your Company Should Follow

  • Define a Clear Expense Management Policy

For you to get the most out of your business expense manager, you would need to define your expense management policy as clearly as possible. Make sure to keep it short and easy to read. That way, even new hires could understand it and would be able to use it right away. 

You see, many employees fail to understand how to use this type of software. Often than not, they find it rather challenging to use. So, define your approach on how to use step by step. That would help them use your business expense manager efficiently!

  • Create a Detailed Expense Report Programme

To be considered to have an accountable plan and fluid reimbursement process, a business expense manager should have these rules.

  • Expense should be business-related.  
      1. This rule is to prevent employees from using their travel and entertainment allowance for personal use. So, in case an employee uses it for their leisure, they are accountable to pay it.
  • Submit expense activities right away.
      1. Well, of course, not instantly. However, employees should submit it within a specific turnaround time. For example, if an employee did not report their expenses within a week, all activities performed will be denied. 
  • Return excessive payment on time.
      1. Just in case your brand overpaid your employees for all the expenses they made, they are accountable to return it right away. In this kind of situation, it is advisable to include a turnaround time. That way, your employees would have time when they could pay it back. 
  • Employ a Corporate Card Programme

Letting your employees carry a corporate card might sound reckless, you should still disclose that idea when you include this expense management software into your company. You see, bringing this type of credit would make the liquidation and reimbursement process a lot easier since they can take pictures of their receipt. 

  • Require Pre-Approval

Including this feature allows you to control which expenses you are willing to pay for or not. It means that your employees should file their expense reports first before you can pay them back or give them reimbursement.

For example, employee A took client B to a restaurant as a token of appreciation for making a deal. In this scenario, your employees use their travel allowance to treat your client since they were able to make them sign a contract. What they do in this situation is valid, so what they have paid for will be transferred to their bank account. Or they will receive their next paycheck.

How to Help Employees Make Wise Decisions

Despite having an automated expense reporting software, it would be a good idea if your employees can manage their expenditures. They could do that if they know if they are making a wise decision or not. However, not all employees are capable of doing that. So, to give them a hand, here are the things you need to consider.

  • Submit an expense report one at a time. It would prevent your employees from creating a duplicate.
  • Use of corporate credit card to track their expenses and avoid fraud,
  • Never allow pre-dated expenses. 

Now, that you have an idea how an online expense management system works, would you still hesitate not to include it into your business? If you are interested, get it at Volve Solutions. Their business expense manager also includes corporate cards that your employees can use within certain limits!