Ultimate Guide to Expense Management for Businesses

Corporate travel and expense management are the most challenging operations of any business, but especially for a SME. Employing an outdated system can further complicate these processes, thus asserting the need for an automated management software that can help identify potentially problematic areas and the ways to save more. This ultimate guide explores all such aspects to ensure seamless management of corporate expenses: 

Employees incurring expenses on behalf of the company is categorized as business expense. The bigger the enterprise, the more challenging it becomes to control these expenditures more effectively but it is equally challenging for a small business although the challenges might differ. Expense management has the potential to contribute to the success of a business significantly. It plays a vital role in a company's financial health and its smooth functioning. Yet it is one area of operation that is often deemed to be the most laborious, time-consuming, prone to errors, and a cause of frustration among all the stakeholders. It, therefore, becomes imperative to have an efficient travel expense management process in place.

A system that straightforwardly manages expenses, and helps to cut the costs to increase productivity and limit the paperwork, is ideal as well as practical. It not only increases control but also improves efficiency. In this article, we will investigate the way to an effective expense management solution and how to ace the way your company manages its expenditure.

So, let's begin with:

What is Employee Expense Management?

 

Business expense management is a strategy used to manage the expense incurred when employees embark on business trips to pursue the company's objectives. It is a multiple-step process that involves payments, expense reports, keeping records, approvals, and reimbursements. But there is more to this process. Setting up T&E policies and ensuring compliance is also a part of expense management.

Why is Travel Expense Software Important?

 

Efficiently managing expenses is essential to keep any business running smoothly and to keep its expenditure in check. These are the primary reasons why there is a dire need for an expense management system. Furthermore, its additional benefits include:

• •  Monitors the spending trends of the employees.
• •  Ensures employees' compliance with the T&E policies.
• •  Increase the productivity of the employees.
• •  Helps identify possible risks and areas of saving.
• •  Enables efficient decision-making.
• •  Makes the company compliant with government rules and regulations.

 

Challenges of Traditional Corporate Expense Management:

 

Relying on outdated expense management tactics might work, but it is not a feasible alternative as it threatens to impact the company's financial health over time. Let us, therefore, have a look at some of the challenges of expense management through traditional methods-

 

Companies draft policies to ease the lives of their employees and administration. Regardless of this, if the policy is not enforced correctly, it can be futile. With manual travel and expense management, it can be challenging to implement policies and gain compliance, especially in the case of small business travel expense management. There is also a lack of communication with manual processes, which further makes it difficult to achieve higher compliance. This results in employees overspending because they are unaware of the spend limit, which can result in violations. 

 

Manual expense management makes it easier for errors to slip into data entry, overlook a policy guideline, and overstate expenses. This fallacy can be committed by both the employee as well as the approver. These mistakes could be unintentional and can be easily missed when expenses are managed traditionally. Even when they are caught, it involves reworking and resubmitting the expense report, wasting the valuable time of the employees.

 

A manually handled travel expense management system offers zero visibility to not only the company's finance team but also the employees. This can easily result in discontent and frustration as it implies taking up the employees' additional hours to gather relevant data. It thus has the power to impact the productivity as well as the morale of the employees. 

 

Traditional travel and expense management requires a lot of manual hard work from the travel admins, finance department, as well as employees. Employees take hours to collate and file expense reports. On the other hand, the finance department has to cross-check these expenses against the company policies, and the approver need to approve and record the expense for record keeping. All of these steps are time-consuming, impacting the turnaround time for reimbursements.

 

Traditionally, business travel expenses are settled through shared credit cards of the company. However, this is never a feasible idea, yet we see this practice being employed in small and medium-sized businesses quite regularly. The problem arises when it becomes difficult to keep track of the expenditure due to a large number of people having access to the same card, and no one can be held accountable for overspending.

 

 

Ways to Improve Corporate Travel Expense Management:

 

The issues mentioned above can be easily resolved by employing the following tactics of corporate travel expense management-

 

Management of expenses has to start within the company by setting up the T&E policies. It helps the employees understand what is and what is not covered by the company, putting a cap on the expenses incurred during business travel. Establishing rules and guidelines in place can, therefore, help to improve the buying habits of your employees.

 

It is essential to constantly analyse the spending trends of the employees travelling for work to gain better insight. It is important for effective T&E policies that will not only cut down on the company's expenditure but also ensure that the employees are content and comfortable when they travel to achieve business goals.

 

End-to-end management solutions for your business travel can take care of the company's expenditure right from filing claims request to cross-checking expenses, approving reimbursement requests, generating real-time reports, easy payments and more. A single booking and expense management tool is the ideal choice for simplifying a company's business travel needs.

 

Opting out of outdated mechanisms in favour of a travel expense management software is a move forward that will prove to be advantageous for all the stakeholders involved. It results in saving time which was earlier spent manually filling forms and spreadsheets to spend on more strategic and productive activities. Here are some of the other prominent reasons to automate your company's exprense filing and reporting  with a travel and expense management software-

• •  Chances of error in expense filing and checking can be avoided.
• •  Employees can file claims and seek approvals on the go.
• •  The approval and reimbursement process can be quickened.
• •  It enables employees to be compliant with the company's policies.
• •  It can help detect as well as prevent fraudulent activities.

 

How to Choose the Best Travel and Expense Management Solutions?

 

The ideal choice would be a management system that comes with a myriad of useful features and is cost-effective. However, the following aspects can be paid attention to while choosing the right solution for your company-

 

• •  It should be accessible to the employees through the mobile app and website when they are on the move.
• •  It should be able to fully automate the company's T&E policy.
• •  It should offer consolidated payment methods.
• •  It should provide customisable workflows for approvals.
• •  It should enable real-time reporting and analysis.
• •  Integrating with other systems like HRMS, ERP, and others should be easy.

 

With over 40% of finance professionals frustrated with the redundant practice of managing expense that involves a lot of paperwork, automating these processes through a travel expense software is the way forward. This is because an automated system can simplify the process drastically while also letting employees focus their energy on being more productive. By implementing an end-to-end corporate travel management solution like myBiz, businesses can also make the most of an integrated expense management system that comes free of cost, saving their resources while fast-tracking on the road to success. So, partner with myBiz and get access to an integrated expense management solution free of cost! Explore more!

 

Frequently Asked Questions (FAQs) About Expense Management

Q1. How can online expense management software ensure compliance?

Ans. An online expense management system can set automatic budget limits, reminders for claims, and flag unusual spending, thus ensuring compliance.

Q2. Can automated expense processes ensure cost-saving?

Ans. Yes, automated travel expense processes set budgets and daily spend limit, thus giving more control and ensuring higher savings.

Q3. Why is an integrated travel and expense management system better?

Ans. An integrated system of T&E management saves more time thanks to quick reconciliation and reporting. It also helps companies save more by consolidating the booking and expense management with the company’s policies via a business travel and expense management software like myBiz.

Q4. How can an online expense management software offer more control?

Ans. Online expense management products enable regulated payments while also capturing the transaction data, thus offering more control to the company’s travel admins and finance department over the spending.

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