The Guide to Effective Expense Management

Time for change

Managing employee expenses should be easy. It’s simply a way to reimburse employees for any business costs they cover from their own pockets. But for most companies, the day-to-day reality of expense management is far from simple.

It has been allowed to grow into a notoriously difficult area of company finances to properly control, and as a result is now a breeding ground for errors, inefficiencies, and workplace fraud.

These problems have been caused by the traditional methods that have been used to handle expenses with manual processing of paper receipts, expense forms, and Excel spreadsheets.

But the limitations created by these processes have now been removed.

Taking control of your expenses 

The emergence of cloud-based solutions means that no business should tolerate an inefficient, costly, and risky expense management setup. With the right tools and attitude, we can transform the way expenses are managed.

In this white paper, we will provide a detailed guide on effective expense management, including:

  • Benefits
  • Expense policy
  • Expense management

Benefits of expense management

The purpose of this guide is to show how your company can unlock expense management advantages for a more secure and simple process.

Some of the benefits include:

  • Streamlined operations - fast, efficient processes
  • Automated checks - real-time monitoring and alerts
  • Flexible solution - fully scalable ways of working

The advice contained is based on two decades of experience acquired by Webexpenses. We help businesses across the globe to take effective control of their out-of-office costs.

Expense Policy

The starting point for expense management is having a policy.
This simply sets out your company’s rules and regulations relating to employee expenses - what can be claimed, how it can be claimed, and any specific limits or allowances.

You can find a full guide to creating an expense policy here.

But here, we are going to deal with some of the most common questions that we receive about policy creation.

QUESTION:
What should an expense policy document cover?

ANSWER:

The main bases you need to cover are:

  • What can be claimed
  • How it’s claimed
  • Specific limits and allowances
  • External compliance requirements

While it can be tempting to try to cover every expense related eventuality, the simpler and more concise that you can make the policy, the better.

An effective approach is to provide a general ethos to go alongside the specific rules and regulations. This can be applied to any costs that they are claiming:

  1. Is it necessary?
  2. Is it reasonable?
  3. Is it verifiable?

QUESTION:
What format should an expense policy document take?

ANSWER:
Whatever form is most effective for your company.

In the past, a policy was traditionally a paper document - printed, copied, and distributed. While some companies still use this approach, there is now a multitude of more effective ways to share and communicate information.

Digital and cloud-based tools offer major benefits, allowing finance managers to centrally control and instantly update information across a company of any structure or scale.

With cloud-based management systems, policy reminders and notifications can be integrated into day-to-day operations. We look at this in more detail in the next section of the guide.

Expense Management

Now you have a policy - you just need to manage and enforce it.

In the past, maintaining an expense policy was a constant battle - one which many ended up losing. It was a case of finance teams having to trawl through mountains of paperwork to make sure claims stayed within policy.

Here are some of the most common questions asked about expense management.

QUESTION:
What are the advantages of digital expense management?

ANSWER:
In terms of general efficiency, it’s the difference between having to handwrite and mail off a letter, compared to the convenience of pinging off an email.

It provides a much faster, more efficient, and powerful way to manage expenses. Moving from an old paper-based process to a digital system reduces processing time and provides much greater flexibility.

The main advantages of online expense management are:

  • Efficiency: The Webexpenses service is shown to reduce processing times by around 25%.
  • Accuracy: Business travel mileage tracked and recorded to meter accuracy.
  • Information: A rich stream of data helps to monitor the efficiency of an expense policy.

 

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