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7 Key Expense Management Best Practices

IMPLEMENTING BEST PRACTICES OF EXPENSE MANAGEMENT ALLOWS FOR BETTER DEVELOPMENT IN A BUSINESS 

Nowadays, every organization takes extra measures to cut unnecessary costs and expenses and maximize their profits as much as possible. Managing expenses smartly without compromising the company’s profitability is always appreciated by critics and helps businesses grow productively. 

Businesses are spending abundant time and energies on expense management to keep a check of all the expenses and manage the business’ economic condition. A precise and on-time reporting of all expenses is essential in order to carry out an effective expense management process. 

Few simple and effective expense management practices are listed below that you can implement in your business for better development of the company and further growth of the employees. 

1) DEFINE YOUR EXPENSE MANAGEMENT POLICY CLEARLY: 

The first thing to start the expense management process in your organization is clear and well-defined policy. The policy requires including all workers reimbursable expenses and exclude individual expenses of employees. The policies regarding expenses must be well understood by the employees to make sure they report their expenses to the organization. Therefore, employees are encouraged to learn policies of expenses management. Better communication with the employees is required to bring out the expense management process in an organization. 

2) A PRECISE EXPENSE REPORT PROGRAM:  

A clear and exact guideline for the employees is needed to make them inform about expenses which can be applicable for reimbursement and which are excluded from the program. Any personal expense must be omitted from the policy and the ones which are not associated with the company in any way. All the expense that has occurred while working for the company should be reimbursed.  

3) POLICIES SHOULD BE SIMPLE AND CLEAR: 

It often happens that employees fail to understand the expense management policies implemented by the company and hence, it becomes difficult for them to make a proper expense report. It is because of this reason, expense policies should be made such that they are easy to understand and employees do not restrict themselves to report on time. Whereas, complicated policies that need to be approved by multiple sources waste a lot of time and should be avoided. 

4) SHORT AND SIGNIFICANT: 

Your expense policies should not ask for irrelevant details of the expenses to be reimbursed. Ask for the details that are necessary that is, the receipts and invoices should possess the right information. Recording each and every single detail of the expense can eat up a lot of precious man hours to automate expense process. Also, various expense management tools should be integrated into business for quick and accurate reporting.  

5) SIMPLE SUBMISSION OF EXPENSE REPORTS: 

A simple and easy mode of submitting expense reports encourage employees to give reports on time. Paper-based reporting is getting replaced by paperless expense reports which are more accurate and less time-consuming. There are applications available in the market for scanning receipts that can create a log of receipts in paperless mode, even while travelling. Besides one can use a smartphone to take a snap and use it for expense report submission in a paperless manner. 

6) TIMELY PAYMENT MECHANISM: 

For timely submission of an employee expense report, you should have a system in place so that expenses can be reimbursed in timely manner. For this system to work, you have to eliminate the multi personnel approval process and administrative bottlenecks from the organization. 

7) EXECUTING COMPREHENSIVE EXPENSE MANAGEMENT SOLUTIONS: 

Nowadays, in the market, there are many online management solutions available that can make the task of expense reporting and managing the expenses very smooth and hassle-free. Timely submission of business expense reports has become very easy due to these systems. These systems can be integrated into the company’s financial management system so double entry of data is not needed for business expense reporting. All in all these systems make business expense reporting very fast and efficient.

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