3 Easy Ways to Manage Expense Claims from Employees

3 Easy Ways to Manage Expense Claims from Employees

Apr 29, 2021, 6:54:47 AM Business

Managers can help their team members by giving them advice and feedback on how to become more productive. However, it’s much more difficult to change corporate culture.

Most businesses struggle with expense management, but this does not have to be the case. Even though some primary business systems have been digitized and revamped to be as effective as possible, the traditional expense management approach is still very outdated. Employees are often compelled to pay with their own money, keep receipts, and complete manual reports. Bad habits are formed over time, and it takes time to change them.

The average company loses millions of dollars to employee theft every year. These losses can come from employee mistakes or theft by the very people you trust to keep your finances in order. Employees need to understand why it’s essential to keep accurate records of expenses and how to do it. There should also be perfect guidelines on what is and isn’t acceptable when it comes to expense claims, and employees should also be made aware of the consequences of submitting claims that aren’t entirely accurate.

It’s essential to focus on the following three critical areas to manage employee expenses and claims.

 

How to Control Expense Claims

 

1. Empower Employees to Spend

 

It’s very likely that in a start-up or SME where the employees don’t have company cards, they share them between themselves.  It can be very convenient if you use your card for everything, but it can also make you vulnerable to fraud. If you’re not careful, your card can easily be used to make purchases and bills for which you will be held responsible.

Expense claims are especially problematic when it comes to companies with no official policy for handling such claims. One part of empowering your employees to spend is to give them their own company cards. Another critical step is making sure they know what they can and can’t use their cards for.

Businesses can avoid overspending by using pre-paid cards instead of credit cards. It’s also a great idea to create tailored budgets, limits and rules for each cardholder, depending on their position and rank within the business. For example, you could set up different budgets for different employees, with limits on how much they can spend weekly or monthly and rules that dictate that they can only spend it on certain things.

 

2. Timely Reimbursement

 

Your company must have a transparent and timely reimbursement process. This is the best way to avoid any issues with employee reimbursements. The last thing you want to do is leave your employees out of pocket.

Suppose your employees are forced to wait for reimbursement. In that case, they might feel discouraged from spending money on things that will help them do their jobs better, such as buying the right tools, attending conferences and workshops, or attending a business program that will help them do their jobs better. It is incredibly demoralizing to wait for reimbursement. It causes a lack of trust between employer and employee.

 

3. Automate the process

Employees may be discouraged from claiming expenses if the reporting process is outdated. If the process is too manual, they are more likely to report minor issues than major ones. This can be avoided by automating the reporting process. Instead of employers and employees wasting time filling out forms or manually entering information, a fully automated solution can help you avoid errors and increase productivity. 

There are many accounting mistakes that small businesses tend to make, and they can all have a significant impact on the financial reports that your business generates. For example, if you’re using an Excel spreadsheet to track your revenue, but you’re not recording every single transaction in it, it’s easy for a sale to slip through the cracks.

 

Conclusion

It is essential to implement a well-defined and structured expense procedure. Employees must understand how funds are allocated and what to expect from the process. They must understand their responsibilities as well as the benefits of following the proper procedure when claiming expenses. By automating the expense reporting process, you can keep track of expenses and reimbursements.

Published by Justin Stewart

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