It’s not likely you’ve given employees open access to your business checking account and allow them to draw funds at their pleasure. Although that scenario may sound preposterous, any employee with an expense account is in a position to spend your money just as freely.
As with many other aspects of your business, technology can ease the burden of managing and monitoring employee expenses, an often tedious and time consuming process.
Traditionally managed through manual, paper-based processes, the management of travel and entertainment expenses is a complex corporate procedure that involves both government regulations and employees’ personal time and money. Despite these concerns, there is certainly a lack of control in ensuring that these expenses are compliant with corporate policies as well as a general inability to collect sufficient data relating to these expenses while keeping administration/processing costs low.
Expense management software, offers a number of benefits to business owners:
- Enforcement assistance. Software can be programmed to flag and even deny items that are not valid business expenses. Limits can also be set for expenses such as lunches and lodging. Though it may be possible for an employee to charge a massage to his hotel room, expense management software can insure that your business is not picking up the tab.
- Across the board efficiencies. Employees can use software to upload expenses and associated receipts at their convenience and the report automatically undergoes an evaluation process customized to your business. Managers and finance departments can analyze reports created from entered data. Software is often compatible with existing payroll and accounting systems for ease of reconciliation and payment.
- Corporate credit card monitoring and analysis. Many expense management software systems are designed to complement corporate credit cards, allowing managers to view activity in real time and better manage risks. Depending on the system, it may be possible to reconcile expenses and create permanent, Internal Revenue Service compliant digital records with the click of a button.
- Better information. Expense management software offers a plethora of options for monitoring spending. Want to know how much is spent with a specific vendor? Or track expenses by department or individual? Automated systems allow users to easily generate reports that can pinpoint inaccuracies or potential abuses.
- Currency conversion. International travel and the accompanying currency issues can tax the most competent of accountants. Software easily converts and calculates exchange rates for accurate reports.
Most businesses find that implementation of expense management software results in savings. Companies surveyed by the Aberdeen Group that adopted expense management software reduced the cost of processing a report by 63 percent and 79 percent reported administrative savings. Of the respondents 33 percent redirected workers to other tasks, and 53 percent cut full-time employees.
Employee-initiated expenses are a necessary part of doing business for many companies. By outsourcing their expense management, many business owners and managers find they can better monitor and even reduce costs.
Learn how a PEO can help you manage and monitor employee expenses. Download our free e-book, HR Outsourcing: A Step-by-Step Guide to Professional Employer Organizations (PEOs).