What tools can I use to manage company spending?
Did you know that nearly 90% of Excel spreadsheets contain errors? Many go undetected until an auditor picks them up and an embarrassing restatement of a department’s budget and spending ensues.
With company spend accounting, there can be errors at every step, and these can prove extremely time-consuming to manage. The employee can wrongly expense an item in the first place, then incorrectly record the amount, assign it to the wrong expense category or code, then wrongly total the amount spent.
In addition, they may subsequently submit the claim without telling the finance department that some items were personal spending. It’s little wonder that finance departments or small business owners become frustrated at the amount of time they have to dedicate to manually processing expense claims.
Understand the errors at every step
The mistakes don’t end there either. If employees have miscoded expenses, the amounts can be allocated to inappropriate cost centres, causing reconciliation problems when the monthly accounts are run, and necessitating journal entries to correct the ledger.
If an employee with a high expense spending limit doesn’t bother to do their outgoing costs for months and then does them all together, this can throw cash flow calculations out completely.
So how can you control company expenditure without having to manage and correct errors at every point in the process?
Use prepaid cards to reduce error and increase control
These cards differ from credit cards in the sense that once you get a prepaid debit card, they can be used to implement your spending policies and limits for each employee and to provide information in real time.
Whereas traditional company credit cards are reconciled and statements produced monthly, a payment card can provide real-time information accessed through a dashboard that allows you to drill down and see what’s really going on.
Having real-time information on card transactions allows you to stop misuse as soon as it occurs. However, it’s far less likely to occur because the card simply won’t work if an attempt is made to use it for types of spending outside of the agreed rules, or levels of spending that are beyond the limits set for a particular employee.
Exploit business intelligence through a dashboard
A credit card statement is all very well, but it provides very little help in discovering what’s really driving spending in the company.
For this, you need to be able to drill down into the data where necessary, so you can see in detail exactly where money is being spent. But you also need the tools that will enable you to analyse trends in spending and spot “out of profile” expense events that may be a cause for concern.
The ability to compare one employee’s expenditure with another, and with the average, can be used to identify people who consistently spend more than their peers, without any justification for this. Do they take a taxi everywhere, while their colleagues are happy to take the bus? This kind of information can be readily identified once the data is in a full-featured expense management application.
Use mobiles to the company’s advantage
Spend management should also allow you to take full advantage of mobile technology. Our solution, for example, can store data from a receipt image captured by a mobile phone. It will then record this information in the application. So no more messing about with paper receipts, expense forms, errors and overdue claims.
The magic trinity of the new expense management technology is:
– customised company card
– mobile data capture
– dashboard for accounting and analysis.
Put these three together, and you have a set of powerful tools that can revolutionise the way in which you manage your company’s spending, reducing wasted finance department hours and allow managers to exert meaningful control. Talk to Soldo here to find out how your company could benefit.