10 good expense management practices to use every day12 October, 2017 9:53 am
Effective expense management is easier today than it’s ever been, thanks to the development of money management apps like Solo Expenses. But, like anything, an app works best if it’s part of a suite of tools used all the time to get the best from it. After all, no golfer wouldn’t set out on a round carrying just one club… Here are 10 tips to get the best from your expense management app…
1. Automate the process: Paper trail systems were fine when there was no alternative. But using that system nowadays almost certainly adds a considerable hidden expense of paying for the time involved in manual intervention to check and process expense claims. It’s unnecessary. There is a better way…
2. Use an app: Business expense management works well only when it’s done in line with procedures and processes that have been thought through. Developers of expense management apps have not only done the thinking for you, but have wrapped it up in a smartphone app that is simple and intuitive to use – making them the best option for keeping control of that part of your business spending.
3. Set limits: Defining boundaries is extremely effective in mitigating against overspending, no matter if it’s accidental or actual abuse. A ‘green light to spend’ policy allows a rein to be kept on finances.
4. Corporate credit card: Apart from preventing personal and company money from being mixed up, use of a credit card has other benefits. Insurance on new purchases is one; the opportunity to earn cashback or frequent user privileges is another. Clarity of spending is also part of the deal, which not only helps finance departments but also reduces the possibility of fraud.
5. Have a policy: If the rules about expense management have no grey areas, claims are more likely to be accurate and timely. Stitch up any potential loopholes, and communicate the policy clearly and in simple language – and then stick to it. For instance, should you allow an expense claim for entertainment when one of the diners is the claimant’s boss, who will also be approving the spend? Perhaps the rule should be that the most senior person present picks up the tab.
6. Know who’ll approve claims: Old-fashioned systems left paper trails like confetti around office buildings. Using an expense management app like Solo Expenses allows you to set up a clear and rigid approvals route which will always be used – and that helps to back up the fixed nature of a system that will keep the numbers accurate.
7. Audit: Underline the rigour of your system by checking a few expense claims at random every month. When everyone knows it’s being done they’re more likely to aim for accuracy themselves.
8. Pick the right payback method: Pay expenses through salaries. If you’ve automated the system up to the point of claiming and approval, then why would you jump off a winning horse and revert to an outdated method. Raising cheques or having people queue to get hard cash from a cashier not only robs the business of productive time, but also builds in unnecessary cost and re-introduces the possibility of error – the very things you’re trying to eliminate.
9. Check the numbers: No, this is not about making sure you’re not being defrauded (though it’s a useful by-product) It’s about using the information locked in the expense claim stats to find out more about your business, and identify things you might do more cost-effectively. For example, if you’re sending a number of people to an event, and they’re all buying an airline ticket, would it be cheaper for the company to charter a plane? Could you negotiate cheaper rates for your people with hotels? Or would it be cheaper still to use videoconferencing, and prevent them travelling completely? It’s a way to reduce cost and enhance work/life balance for the team… All could save money, and isn’t that what expense management software is supposed to do for you?
10. And finally, you: We’ve saved the most important until last. And by ‘you’ we mean ‘you and your employees’. No matter how well an expense management app has been created, or how feature-rich it is, it won’t reach its full potential if it’s not used correctly. Diligence is the key. All spending needs to be captured, and filed in the right place. Fail to do that, and your chosen app won’t be able to reach its full potential for your business. Never, ever, allow for any kind of expense fudging. If you make rules and stick with the app your business expenses will be controlled, reasonable, accurate and auditable.