It is common, however, that in many SMEs a finance department normally comprises less than one employee, a part-time finance controller or even the business owner trying to keep on top of the finances themselves.
With so much riding on this function, it’s crucial that business owners create streamlined efficient processes and management systems for company expenditure.
A common pitfall in many small to medium businesses is the handling of employee expenses. This is a frustrating task for both the employee and the employer which can become a significant overhead in any business. That said, inefficient management of company spending can create terminal problems in some SMEs.
Employees begrudge spending their own personal money on expenses and then having to waste precious work time on claiming the reimbursements. Conversely, finance departments are often left with large unexpected payments to make each month when an employee processes their expense claims. This can put a real strain on the cash flow of a smaller business and employee morale can be adversely affected if the claims are not paid promptly.