4 Tips for Managing Employee Business Expenses
Did you know that approximately 85% of employees admit to lying on expense reports? This translates to more than $150 million that businesses spend due to employees inflating expenses on reports.
So, how can you stay on top of employee business expenses to ensure that a firm policy is adhered to?
Keep reading for 4 top tips on managing business expenses to allow employees autonomy and reduce fraud.
1. Create a Firm Expenses Policy
It’s important that your company has a specified business expenses policy. This should outline exactly what expenses are covered by the business, how the reimbursement process works, and the expected timeframe.
Without a well-defined policy, there runs a risk of disputes and it hinders effectively managing cash flow.
A firm policy allows for transparency and provides your employees with a sense of autonomy when it comes to spending company money as they won’t have to get everything signed off first.
2. Simplify the Process
Take the time to ensure that managing business expenses is as simple as it can be. Complex expense reports and reimbursement procedures are time-consuming and can cause errors that affect the business finances.
Iron out the processes so that they are straightforward. This includes security clearances and forms.
Create a system that keeps track of invoices, receipts, and statements and ensures that all of this data is centralized. Make the switch to digital and implement software to assist you if needed.
3. Provide Suitable Payment Methods
For efficient management of employee expenses, it’s advised to offer a specific payment method. This way you don’t need to track expenses that accumulate on employees’ personal accounts as this can become confusing and difficult to manage.
Provide each of your employees with a business expense card such as this one. Expense cards are flexible and you can tailor them according to your expense policies and the employee’s needs.
Avoid using one company credit card. This may seem like the smart option for small business expenses but it simply isn’t realistic in the long run.
4. Track Errors and Fraud
Expense fraud is terrifyingly common. Some of these errors are honest mistakes and some are intentional. It’s important to identify errors such as fictitious expenses, overstated expenses, mischaracterized expenses, and duplicate reimbursements.
Take time to go over expense reports and investigate any suspected fraud. If you can get rid of expense reports entirely, and opt for agile payment solutions, this is the ideal option.
Stay On Top of Employee Business Expenses
Managing employee business expenses doesn’t have to be complicated and full of fraud and errors. Simply get started with these 4 tips to help you stay on top of things. First things first, define a firm and clear expense policy.
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