Expense Management Tips For SME’s — Challenges And Solutions
Expense Management Tips For SME’s — Challenges And Solutions
Expense Management Solutions may have been pushed to the back burner due to the transition to working from home. After all, we aren’t flying every other week or participating in team-building happy hours. However, CFOs must keep in mind that employees are still spending money. Although there are more costs for SaaS products than for airport burgers and coffee, managing expenses is just as crucial, if not more so, now that there are concerns about extending the cash runway.
What Is Expense Management and How Does It Work?
Expense Management Software for SMEs keeps track of employee spending and decides how the company will refund the costs. It also employs the methods and policies that are utilized to manage this type of expenditure. For example, when employees are given daily meal allowances while traveling, the expenditure management procedure considers those limits when creating reimbursements for workers.
The tips for expense management for SME
There are a lot of tips that you can follow for expense management. Let us have a look at some of the major ones that Centiga advices to follow:
- Establish a policy for managing expenses.
Create an expenditure management policy that everyone must adhere to. Include a detailed list of the expenses the firm will cover and a list of which expenses the company will not cover. The Internal Revenue Service (IRS) has regulations governing the deductibility of costs for tax purposes.
Consider the following when looking for the best expense management software in the UK:
- You won’t be able to deduct expenses for commuting between an employee’s home and the workplace regularly.
- Keep in mind that the IRS per diem rates for meals and eligible mileage rates impact how much you can deduct.
- Many employers prohibit employees from using laundry or dry-cleaning services while on the road, although these expenses can be deducted in many circumstances.
- Wherever possible, automate expense management.
Manual expense management solutions for businesses necessitate a significant amount of paper and spreadsheets. When people worked together in an office, this was inefficient; now, it’s ungainly. Employees, managers, and accounting teams can benefit from an automated cost management system that streamlines the expense reporting process. Reduce the amount of paper shuffle and file sending.
- Issue credit cards for businesses.
Corporate credit cards not only help employers keep track of spending, but they also make it easier for employees to record expenses and eliminate the need for employees to cover costs and wait for reimbursement.
Credit cards assist employers in maximizing cash flow by giving terms (typically net 30) before payment is due and simplifying record-keeping by centralizing spending data. Single-use or dollar-amount cards are a good option for companies that don’t want to provide their staff permanent cards with high restrictions.
- Make it as simple as possible to keep track of your costs.
Create a reporting system that makes it simple for employees to submit receipts and expense reports. Receipt photos are captured using cameras on mobile devices since paper receipts fade, rip, and get misplaced. In addition, many businesses use automated software that allows for image uploads, spending tracking, and submission. Accounting teams, managers, and approvers can access and approve or reject reports and initiate the expenditure reimbursement process using these technologies on their own mobile devices or desktops.
- Audit your procedures regularly.
It is not possible to “set it and forget it” when traveling and spending management. Accounting employees can watch spending over time, identify potential problems such as overspending or false receipts, and make judgments on how to alter policy in the future through frequent audits. For example, even a small increase in spending by one employee overtime might add up. Regular audits will aid in the early detection of anomalies before they become severe problems.
CFOs are aware of factors that make audits more challenging for all parties involved. One option is to buy software that isn’t capable.
- Review your expenses regularly.
Don’t wait until the end of the year to discover that a recurrent charge should never have occurred or that an employee was accruing non-allowable entertainment expenses while on the road — or using an unapproved SaaS software at home.
Examine whether each spending was required and permissible if the organization obtains the best price available and if any expense categories have increased significantly since the previous review. This activity will help you identify problem areas that require attention.
- Instruct your personnel on how to keep track of best practices.
Keep your cost management method and policies open to the public. Instead, engage all employees by teaching them how to find, implement, and track best practices across the company.
Because reimbursable employee expenses account for a sizable portion of most organizations’ balance sheets, this is an ideal time to foster a cost-conscious culture. Link frugality and the ability to invest or just save jobs. Most businesses have been compelled to postpone, scale back, or abandon capital-intensive projects. Right now, cash is king, so any bit of liquidity helps.
- Prevention of fraud
According to the Association of Certified Fraud Examiners (ACFE), of the internal fraud schemes reported by small businesses (those with fewer than 100 employees) and larger organizations, 20 percent of small businesses and 13 percent of larger organizations have reported fraudulent expense reimbursements.
Clearness and transparency will help you fight this. When the regulations controlling expenses are unclear or imprecise, the chances of committing fraud skyrocket. Knowing that finance has given out the ground rules and is paying attention can deter someone from crossing the line in some circumstances.
Conclusion
A software-based receipt collection and submitting process makes expense reporting less painful for colleagues and makes it easier for them to submit receipts and expense reports. Expense Management Solutions for Business also speeds up employee reimbursements by reducing the accounting department’s time to review these reports. It also allows them to quickly spot reporting anomalies. If you are looking for expense management solutions, Centiga can offer you the best help. It is the best place to look for solutions related to the management of the expenses. The expert team understands the needs and gives you the right advice to keep control of the expenditure and enjoy constant growth.
