Managing employee expenses can be, frankly, a bit of a pain in the backside. This is particularly the case for smaller businesses who perhaps don’t have stringent policies, processes and management software in place as yet.
However, it is absolutely critical that you manage expenses efficiently while also maintaining high productivity levels. Ultimately, you need to strike the right balance in order to enable your staff to carry out their roles effectively each day (which may incur expenses on their behalf) and make it simple and quick for them to log and be repaid for any expenses.
So with that in mind, here are a few strategies that will help improve expense management without diminishing productivity.
Creating Clear & Consistent Expense Policies
First, you need to have clear and consistent expense policies in place.
Now, “policies” often sounds like overkill for smaller businesses but they’re really not.
These can be simple documents which should:
- Educate your staff on what expenses are
- Make clear what is allowed and what is not which in turn eradicates the risk of disagreements late
- Outlines the process for claiming expenses
- Tells staff what documentation (receipts, invoices etc) they need to have to hand when making an expense claim
- Provides advice on resources for using any specific software you may have to manage expenses
- Outlines what to do if a potential necessary work expense falls outside of the usual expenses (who to speak to etc)
- Maximum expense amounts permitted
These policies are vital. They don’t have to be war and peace type documents – a couple of pages long with simple wording is ideal.
Make the Most Technology for Efficient Expense Management
You are making expense management a lot harder than it needs to be if you are not using some sort of technology. These days, there are literally hundreds of tools that can be used to streamline the process, such as apps for receipt tracking and automated approval workflows. Prepaid business cards are another excellent solution that gives employees flexibility to manage their expenses while preventing overspending with a limit in place.
This can make expense management much easier while giving insight into spending habits.
Manual management of expenses means more time spend documenting expenses by staff and more time spent by finance on reimbursing, reconciling and checking them.
Simplifying Reimbursement Processes to Save Time
The reimbursement process is critical for employee satisfaction and productivity levels. Therefore, you want to simplify this process so employees can be reimbursed without any issues arising. Digital submission of receipts and automatic processing of reimbursements can make this process much more efficient and help to keep staff happy. Additionally, this simplified approach can make work easier for finance teams.
If employees are paying expenses out of pocket and claiming back, make reimbursing quick.
Balancing Cost Control with Employee Satisfaction
It is important to understand the stress and strain that expense management can have on staff, impacting satisfaction and performance levels. Providing your team with tools like prepaid business cards enables employees to perform their jobs effectively without a stressful and complex system causing frustration. This will help you strike the right balance between cost control and employee satisfaction.
Take Feedback and Tweak
No approach to expenses is perfect and different members of your team will prefer different approaches and technology.
So remember to take feedback as you go and if something isn’t working, don’t be afraid to adapt it.
Good luck!
