It can be difficult and time-consuming to manage employee spending, especially if your team incur them when working away from the office. However, it is a recurring task for most finance teams since it is essential for businesses to keep an accurate record of spending.
When it comes to employee expense management, most businesses have the following requirements:
So, how should you track employee spending without committing your finance team to an endless, time-consuming paper trail? Here are six tips to help you track employee spending.
One of the best ways to track employee spending is to use a controllable payment method, such as our prepaid Mastercard. This can help to manage and track employee expenditure, and it means that you will always have an accurate record of expenses. Our solutions, for example, allow finance teams real-time access to expense transactions so you can check a given account whenever you want.
Another benefit of a prepaid card is that you can control the amount employees spend since you load a specified value onto the card. This means that you can always provide your team members with sufficient money to cover their trip, and it reduces the chance of dishonesty or profligate spending.
It is essential to define and enforce strict policies relating to expenses, as this will encourage consistency and ensure adherence to your internal accounting standards.
This is relatively easy to implement; you can simply hand out forms to employees that they need to fill in for each expense. This means there will be a paper record for every expense. However, our solution can automate expense policies; you can define limits, geographical constraints and even limit transaction types for each cardholder.
You will need to set expense budgets for every employee to ensure that they only use company money when they really need to. It is also important to define different expense categories such as restaurant bills, supplies and equipment, travel and hotels.
Once you have done so, you will need to set spending limits for each category. Again, Soldo's ability to define pre-loaded cash amounts and other policy elements at individual cardholder level can alleviate much of the associated administrative burden.
It is vital to set time limits for reimbursements, such as one week or one month. This means that you won't end up with several months of invoices to go through, so it will be easy for you to stay on top of payments.
It also means that it will be simple for you to predict how much employees spend per month and will preempt any cash flow shocks associated with rolled-up expense claims. The real-time processing inherent in our solutions eradicates this issue.
Once you have set all of your limits and rules, you should notify every employee, explaining the rules in detail. This means that everyone will understand how to use the card, and you can provide a dedicated finance team email address for staff to use if they require help.
Various studies have found that expense fraud affects over 10% of companies. Prevention is always better than cure, with our prepaid cards making it very difficult for employees to falsify their expenses. However, flagrant falsification or fraudulent use may well be a matter for the authorities although any such decision must be made at a senior level with the broader interests of the business in mind.
Learn more about Soldo and get full visibility and control of employee spending in your company.