Editor’s note: ‘Expense management: Best practices for early-stage companies‘ is a guest article written by the Volopay team.
Whether you’re a budding entrepreneur or the CEO of Amazon, your business growth journey will be rife with challenges. One of the biggest recurring challenges that some of these businesses tend to face is poor expense management.
With cash flowing in and out of your company, sometimes it is hard to keep track of the accounts. If you don’t track your expenses at the early stages, you will never be able to keep track of them. Out of the thousands of online expense management options available, how do you determine the most suitable process for your company? Here’s how.
Discard traditional, work-intensive processes
Companies that manually report their expenses are usually burdened with working with papers, receipts, and spreadsheets. As a result, employees have to save and submit receipts, even for small transactions. It is a tedious process that is highly susceptible to human error. After all, employees have to manually record their receipts on spreadsheets for the company’s record.
The last thing you want is having your employees mistakenly mix up personal and work-related expenses in the process.
For a manager, this process can be draining. What if receipts go missing in the process? That is a distressing situation that a business would want to avoid at all costs.
If your company can relate to this, fret not! The process of switching from a bullock cart to an electric car may take some getting used to. However, moving from error-prone spreadsheets to organised expense management software only takes a few seconds. Allow Volopay to help you ease your troubles by managing everything under one platform.
Implement an expense management policy
To move a step closer towards a more seamless expense management process, your company must have a strong expense management policy. Establish a set of guidelines for your employees that will help them understand and analyse the inflow and outflow of the company’s funds. This will also help your employees’ understand which expenses are claimable.
Make sure that the authorisation process is transparent – from where to submit your receipts to who approves of the bills. Keep tax payments in mind while you outline your policy. Also, don’t forget to ensure your guidelines are in a clear and concise language to all employees.
Digitise the process of expense reporting
With a digital platform for all your expense management, you can easily unshackle the burden of collecting, storing and authorizing receipts. Managers can simply allot separate virtual cards to every employee of the company with a digital platform like Volopay. Now every time an employee needs to access the funds, his employer can simply add the specific amount into his virtual card. The employee can then proceed with the transaction in real-time – and the job is done. No more reimbursements and paper receipts. Plus, the manager can prefix budgets into cards for future payments the employee will need.
Apart from the independence and the flexibility that the employee gets, an expense automation software will also significantly increase spend transparency and visibility. This makes it easy for the finance managers to track any out-of-policy spends.
This way, implementing your company’s expense policy also becomes easier. Employees also get a clear idea of in-policy and out-policy company expenses. With automation comes great employee independence, spend transparency, and the ability to completely administer your budget in the palm of your hand. Adopting an expense automation software like Volopay comes with no strings attached.
Issue individual cards to employees
In a working office, one of the main expenses that managers tend to overlook are subscriptions. For many years, credit cards were the popular option to handle expenses. But now they are more of a plastic waste than anything else.
Like standard credit cards, virtual cards operate in almost the same way. The only difference is you can create multiple digital cards for different transactions. When the card is given, it can be attached to a central account for banking purposes.
Managers can create different cards for different subscriptions. A certain amount of money can be added to these cards to skip the monthly hurdle. You can also have unlimited virtual cards as per your subscriptions. Therefore, you can even allow a certain card for a single software subscription.
Employers can also set recurring payments according to a time frame to pay for the subscription automatically. This helps carry out payments in advance so you never have to keep a check on subscription spends. Expense automation software also lets you delete or freeze a virtual card when you don’t want to pay for a certain subscription anymore. This way, both employers and employees can easily access and pay for bills using virtual cards.
Look out for frauds inside your company’s expense management process
Employees are one of a company’s biggest stakeholders. They are hardworking, they build your company, and they are with you through thick and thin. And as an employer, you make sure that they get the best treatment at the company. With office vacations, medical, life, and vision protection schemes, their wellbeing is one of your biggest priorities. And loyalty is one of the key factors that keeps this employer employee’s relationships healthy.
Of course, in some unfortunate cases, some employees may commit frauds with their company by looting small amounts of money occasionally. Expense reimbursements come in handy to them in this process. The statistics have proved that more than 25% of business fraud comes with employee expense fraud. The worst part is, it takes more than 2 years to detect any expense frauds.
Some employees these days have the resources to submit fake receipts at their fingertips. They produce fake receipts for purchases they haven’t made, or they produce a bill that is altered. To overcome this, use secure platforms to submit receipts, which have your entire trust, just like Volopay. Volopay platforms are secure, seamless, and easy to monitor. By setting limits on each card, managers also have access to recheck the receipts that are submitted; and reject bills if there’s no accountability.
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