How to Track the Expenses of Your Remote Workforce


Finance Insights for ProfessionalsThe latest thought leadership for Finance pros

Thursday, February 4, 2021

Remote working skyrocketed in 2020 as a result of COVID-19, presenting finance managers with the question of how to manage expenses incurred by people working in a range of locations.

Article 4 Minutes
How to Track the Expenses of Your Remote Workforce

Aside from the clear health implications for every member of the workforce, one of the most significant consequences of the COVID-19 pandemic for businesses was a sudden increase in people working remotely to reduce the risk of the virus spreading in workplaces.

While this created a range of challenges, many companies were able to continue functioning with a large portion of the workforce doing their jobs from home.

This raises the possibility that remote working will remain a common feature of how a wide range of organizations operate in the coming years. This is likely to be welcomed by employees, with nearly nine out of ten people wanting the option to choose whether they work from home or in the office once COVID-19 restrictions ease.

Having fewer people in a centralized workplace can have financial benefits for businesses, mostly thanks to lower on-site costs. However, this trend can also raise new concerns and considerations, such as tracking the expenses of remote workers.

Is your expenses policy up to date?

It's important to ensure that your company policies regarding expenses are up to date and relevant, in light of the significant changes that have occurred in how people work and how businesses function in recent times.

Take a look at your existing policy and determine which areas are still pertinent to how your employees go about doing their jobs right now. If these guidelines haven't been reviewed for some time they might not even mention remote working - something that needs to be rectified as quickly as possible.

You might want to consider creating a dedicated remote working policy guide, which will prove equally useful for managers and employees looking for complete clarity where expenses are concerned. The details included in this particular area of your policy might depend on whether your staff are simply given the option to work from home or are required to do so. The cost benefits people gain from not having to commute could also be a factor.

What employees can and can't claim

What remote workers can and can't claim is a key issue that needs to be covered in detail if you want to create an effective expenses policy and ensure you're properly tracking costs.

Employees working from home should be able to claim any additional expenses they incur solely for business purposes. This might include:

  • Licenses for software that's vital to their job
  • Additional furniture or equipment they need to work from home
  • The cost of work calls made from a home phone
  • Stationery and resources that are being used only for work purposes, such as paper, envelopes and printer ink cartridges

Costs that would be incurred regardless of whether the employee is working at home or in an office shouldn't be classed as work expenses. For example:

  • Broadband, unless service limitations mean the user has to pay extra in order to work from home
  • Food and drink, unless this would usually be provided for free in the workplace
  • Property maintenance costs
  • Water rates

Finance teams need to make clear distinctions between what the company's employees can and can't claim as expenses. It's also important to have processes in place to track expenses, so you can evaluate all claims accurately and make sure you're issuing the proper reimbursements.

Tracking expenses

Keeping track of all the expenses claims your employees make can be challenging, especially if you have a large workforce encompassing a range of roles and activities.

Adding remote working into the mix can make this job even more demanding. Having people based in several different locations can turn the process of monitoring expenses and ensuring they're properly submitted, reviewed and approved into a major logistical challenge.

Fortunately, this is a function - like many areas of business in the 21st century - that can be optimized with technology.

Dedicated expenses tracking software and applications can make the process much easier for all involved. For example, an employee who needs to submit a receipt for a work-related purchase can simply scan the receipt and upload it to the system, rather than having to physically send it to a central location where it can be checked. The speed and efficiency of this method will help workers keep on top of their expenses on a daily basis.

For managers, one of the clearest advantages of specialist software is the ability to approve or deny requests as they come in, rather than having to process large batches of claims that arrive all at once.

Dedicated systems also make it easier to maintain visibility over all the claims being made by individual members of staff. This can help you to spot inconsistencies or cost inefficiencies that need to be addressed.

With remote working set to transform how many businesses operate in the years to come, it's worth looking into how you could benefit from leveraging technology to modernize your expenses tracking.

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