Employees often need to spend money to help your business reach its goals but how do you ensure this stays under control and your finance department is happy?
Most successful business owners understand that you have to spend money to make money and employees are a key part of this. From travel expenses to new equipment and even client lunches, it's important for a company to have the ability to dole out the cash when it's needed.
But poor guidelines, miscommunication and inconsistency can lead to frustration from everyone. If you lose control over your employee spending, staff will feel chastised, your finance department will be panicked and your decision makers will grasp at straws for a solution.
By embarking on good employee spending practice, you can help ensure this doesn't happen. But what are the hallmarks of healthy spending and when do you need to rein back some control?
Create a clear and transparent framework
You need to ensure there are guidelines in place detailing what is appropriate spending and what isn't. Obviously you won't be able to name every instance where your employees may need to buy something in their job and there will be an element of allowing people to use their own judgement, but having a clear framework can help to reduce problems.
It may also be appropriate to set maximum amounts that you are happy to cover to give staff a good idea of what is considered reasonable. Make it clear what type of receipts or other evidence is needed to back an expense claim and talk to finance about what other information they need to make the process more streamlined.
Automate wherever possible
Research has shown how automating travel and entertainment expenses can improve businesses, driving value as well as reducing the amount spent by the average employee. It's important to invest time in finding the best solution for your company that works for staff and gives your finance department complete transparency.
Cloud-based options are increasingly being used to help finance automated employee spend processes, while also making it accessible for users. It means that finance can get a clear picture of spending throughout the business in one convenient place.
Empower your finance team
Presumably you hired your finance team because they were good at their jobs and it's important that you give them the autonomy to do it well. These professionals need to have your support to work smartly and use the resources at hand.
Having automated solutions to do the number crunching allows finance to spend their time analyzing and ensuring your company complies with the necessary regulations. Software can help to flag up any discrepancies and make sure you're claiming the right level of VAT, empowering professionals to clearly see the information they need.
Find employee-friendly solutions
Expenses can seem like a massive headache for employees, who also have to do their day-to-day job. Making it as easy as possible for them to comply with your policy can save everyone time and hassle.
Smartphone apps can be a perfect solution and optical character recognition (OCR) in particular. This allows employees to take photos of receipts as soon as they get them and then send them directly to finance, reducing the risk of it getting lost or staff mis-entering information.
Consolidate red flags
Whether finance do it or you have software that automatically brings the figures together, you need to have a regular document that shows all employee spending, any red flags or discrepancies and any recommended actions.
Doing this manually can not only be time consuming and laborious but can also lead to a number of errors, so finding a solution that does at least some of the leg work is advantageous.
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