How do I automate expense management?
Many CFOs are asking themselves this question, as they look at the increased processing time taken up by expenses administration, and the distortions that traditional expense systems can introduce into financial reporting. Here, we take a look at how to automate expenses, finishing up with a quick guide for managers.
It’s clear that the time that the finance team spend checking and inputting expense claims, invoices, mileage claims, till receipts and petty cash vouchers could be spent on more productive activities.
What’s worse, individuals can cause spikes in cash management with tardy submission of large expense claims. If the business has sent employees on assignment to a client site, with airfares, hotel bills and hire cars being reclaimed through expenses, the amount can add up.
If the employees are late in submitting expenses or have trouble sending them when out of the office, the resulting upward blip in expenses when they do get round to a reclaim, can distort financial reporting and unexpectedly drain cash.
Even if a directly billed company card is in use, the employee has expenses that have to be paid for in cash – bus tickets, taxi fares, meals, tips, refreshments and so on. In terms of wasted time processing these, it’s not so much the cash amount as the sheer number of receipts.
Issue different types of card from one system
With automated expense systems, control starts with who is allowed to spend, on what and when. The finance team can set rules and limits for each card that is issued and alter the parameters to ensure appropriate use.
While some cards used by senior staff may have a spending limit, others will be stored value cards which employees can use for smaller purchases. Solutions such as ours even allow for virtual company cards, enabling authorised users to make online purchases on behalf of the business or organisation. Limits and rules can be set for groups of employees, and for individuals.
Manage cash in real time
Our systems provide a dashboard that allows cards to be loaded with value and issued instantly. No more waiting around for the bank to send the card or worries about cards getting lost in the post. So once the type of card is chosen and the rules set, the card can be issued immediately. Learn more about how to get a prepaid Mastercard here.
Record and monitor transactions in real time
Whether it’s a junior data administrator popping out for milk, or a senior executive flying off to Germany for a meeting, every purchase or booking for which the card is used can be transmitted straight back to the expense management system. This gives the enormous advantage of real-time insights into spending with consequent robust control. If limits are reached, exception alerts will be flagged on the dashboard.
Finally, the finance team will be able to bid farewell to processing bits of paper from tills. Soldo’s app allows employees to take a mobile phone snap of the receipt, and our expense management system will store the data from the receipt. It can then be entered into the expense management system which integrates seamlessly with the major business applications including Xero, Concur and Expensify, removing the need to transcribe data by hand.
Quick guide to expense management automation
1. Decide which employees are allowed to incur expenses, and what kind of expenses they are
2. Pick an expense management application that can provide different prepaid cards with individualised spending rules and limits, mobile phone receipt capture, a dashboard and integration with accounting systems
3. Set up the dashboard and train the finance team in its use
4. Ask responsible managers to define the rules for each employee type or department including limits, cash loading, geographical constraints and allowable expense types
5. Input the new expense profiles
6. Redraft relevant spending policies to explain the new business process to employees
7. Train the finance section and employees, if required
8. Issue the new cards
9. Start receiving and managing real-time spending information
It really is that simple. So to get your finance team doing something more productive than sorting till receipts and inputting data from claim forms, get in touch today.