Today, many organizations put a great emphasis on expense management best practices to keep a track of all expenses and keep them to a manageable extent. A precise and timely reporting of all expenses is important for seamless expense management process.
For people who don’t understand what is an expense report, it’s the itemized list of all travel expenses with travel dates, purpose etc details that employees need to submit to the organization, to ensure reimbursement of these expenses.
Here are a few simple and effective expense management best practices that you can implement in your organization to witness the visible changes.
1) Write your expense management policy
With a clear and unambiguous policy, you can start the expense management process in your organization. The policy needs to include all employee reimbursable expenses and should adopt measures to exclude personal expenses of employees. The expense management policy needs to be communicated to the employees and they need to learn what process they need to follow to report their expenses to the organization.
2) A well-defined expense report program
There should have a clear guideline about which expenses are applicable for reimbursement and which could not be included in the program. The expense must be associated with the business and it should not be a personal expense. The reimbursable expenses must be incurred while performing duties on behalf of the organization.
3) Keep it simple
Many times employees fail to understand the expense management policy implemented in the organization and this makes the task of business expense (Also refer: Prepaid Expenses Vs Accrued Expenses) report rather challenging. This is the reason why you need to keep expense management solutions simple and unambiguous so that it won’t restrict employees from reporting on time. A complex process with a multi-layer approval mechanism may prove more time-consuming and may waste precious man-hours.
4) Keep it short
You have to reimburse expenses that don’t mean and ask a comprehensive detail of each expense from your employee. Ask for relevant details only, and this will help in the accuracy of the expense reporting. There are free expense report tools that could be integrated into the financial system of an organization for fast and efficient expense reporting.
5) Simple submission of expense reports
The organization should provide employees a simple way of submitting their expense related reports. A paperless expense reporting will prove more accurate and speedier in comparison to paper-based reports. There are receipt scanning applications that one can use to secure receipts in the paperless mode, even while traveling. Besides, one can use his/her smartphone to take a snap of the receipt and use it for the expenditure report submission process in a paperless and green manner.
6) A timely payment mechanism
When you seek a timely submission of an employee expense report, you need to have a system in place to reimburse the expenses in a timely manner too. For this, you need to remove the multilayer approval process and administrative bottlenecks. It’s always appreciable to stick to a fixed timetable for approving reimbursements for the submitted expense reports.
7) Implementing global expense reporting solutions
There are professional expense reporting solutions that can make the task of expense reporting and expense management solutions smooth and hassle-free. With integrated features, such a system will allow timely submission of business expense reports. Since the system could directly be integrated into a company’s financial system, there is hardly any need to key in the data related to business expenses. Importantly, such expense management solutions come with adorable features that make the task of managing business expenses fast and efficient.
TO THAT END:
By streamlining the expense reporting system, an organization can better include all those expenses that may qualify for a tax write-off as per the IRS guideline. This is one important advantage that an organization would never ignore that it would achieve after implementing expense management best practices, besides saving time and money and elevating the internal processes within the organization. Moreover, there are expense management solutions available online and to be accessed by mobile devices that can improve efficiency and encourage cost savings too.
Using the expense management best practices enables to effectively handle expenditure according to your company’s needs and employee’s needs.
GLOBAL EXPENSE REPORTING SOLUTION: INVOICERA
The automated expense management software is an easy solution for all expenses need and helps businesses analyze profit, loss and cash flow. Get a detailed overview of financial performance and efficiency of people working on billed, unbilled and internal projects. Invoicera offers a complete online invoice/ billing and expense management solutions for your business.