Managing employee expenses is one of the challenges many small business owners face. Regardless of how challenging it appears, the process has to be regulated often as it greatly helps an organization to run smoothly and efficiently.
A survey conducted by Certify for the 2017 Expense Management Trend Report identified that 44% of companies don’t track expense processing costs, which is more important than ever. From expenses as little as purchasing a simple office supply to dining with prospective clients or international travel, business managers often fail to keep track of it. Nevertheless how tedious or complicated the process may appear, companies should monitor employee expenditures. Here are a few tips on how you can better track company expenses.
Create a Company Expense Policy
It’s important to establish healthy expense habits from the start, and one fundamental way to do this is through creating a company expense policy.
Speak to your managers and key employees to get a feeling for how much your T&E (travel and expense) costs and write up a policy. Make sure you aren’t giving too much flexibility, however, as expense reimbursement fraud makes up to 15% of business fraud with an annual loss of $26,000 (Association of Certified Fraud Examiners).
To avoid over-budgeting or fraud, small businesses can identify expenses and break down the policy as per the price level. Also, for employees working in different hierarchies, you can create customized policies and minimize expenses.
Above all, keep the expense policy fair, clear, and easy to understand. Not only will your employees be more willing to follow the policy, but you’ll also foster positive company morale.
Get a Commercial Prepaid Card
T&E(Travel and Expense) programs can help the growth of business organizations by saving money on frivolous charges. Many businesses have to spend on travel, food, hotel, and other miscellaneous things on a monthly basis, which can be expensive. Without proper tracking mechanisms, you run the risk of uncontrollable employee spending which ultimately impacts your business cash flow.
Some commercial prepaid programs, like the CONEXT® VISA® Prepaid Card, offer the ability to track employee spending in real-time. With the ability to monitor employee spending closely, small business owners can intelligently prevent against over-spending. And, with CONEXT, small business owners can implement spending controls for certain employee sub-cards in an effort to prevent financial mismanagement.
Reward Employees for their Smart-Spending Decisions
Providing incentives for smart employee spenders is a great way to influence expense management. These employees are an asset to your company, and by showing your appreciation for them, they’re more likely to continuing proper spending habits, and even influence other employees. Offer them gift cards, bonuses or even extra days off to show them you appreciate them – it’ll go a long way.