Managing employee expenses can be one of the most irritating tasks a small or medium-sized business can have. Tracking receipts and accounting for spend incurred can be a real hassle - not to mention the headache of sorting through travel and entertainment (T&E) expenses from employees. More than ever, small businesses need to efficiently control costs and optimise cash flow, but how, and what role does automation play in this process?
When most people think of expense reporting, they think of travel and entertainment (T&E) expenses. However, for small businesses, the need for an expense claim solution can go beyond T&E expense management to the everyday business expenses (e.g. utilities, office supplies, advertising, etc.). Managing these expenses can have a major impact on a business when an official audit is carried out and discrepancies are found between what is and what should be. Managing T&E and other business expenses effectively and efficiently is an imperative - not just a nice to have.
Small and mid-sized businesses tend to have different business expense management needs, compared to large organisations
Smaller organisations tend to expense a broader range of items than large organisations. Ensuring that claims are valid, and that tax and other legal issues are dealt with correctly, is a major concern.
Although the spreadsheet still rules, it is a costly way of managing expenses
Transcription errors, fraud, lack of centralised data and therefore the capability to report on expense trends, along with the sheer effort required to check and consolidate spreadsheet-based expense claims should drive small and mid-sized businesses to review usage - and look for more effective alternative solutions.
Business expense management will always be a cost to the business
Business expense management is a "commodity process" - one where carrying the process adds no real value to the business. The aim has to be to minimise the cost of operating the process. Manual, internal means of operating business expense management are not conducive to minimal cost.
Automation has to be the goal
Enabling employees to log expenses closer to the point of transaction and using direct consolidation against the employee's credit card records speeds up how expenses are dealt with and avoids errors in submission, with the added benefit of minimising fraudulent claims.
Domain expertise is a growing need
As more of the employee base becomes mobile, and the mobility includes crossing geographic borders, the need to understand the legal aspects of such mobility is far more difficult for a small or mid-sized business to manage. Using a dedicated external service provider to manage business expense claims means the costs of maintaining such knowledge are shared across a broad user base, and future legal problems can be avoided.
On-demand business expense management helps both the business and the employee
Using an external system to automate business expense management not only avoids the costs of a manual system, but also avoids errors and enables better reporting and trend analysis for internal and external needs. The employee also has a less invasive and impactful process, and claims are dealt with far more quickly and effectively - with fewer iterations between the business and themselves over possible errors.
A forward-looking provider is needed
As the internet embraces more areas, the need to incorporate mobile phones and other devices, along with direct integration into third party charge and payment systems, will increase. Quocirca recommends looking for providers who can demonstrate leadership in such areas.
Business expense management can be a costly and legally difficult set of processes to manage. Through the use of an on-demand provider, processes can be automated, errors can be avoided, and legal needs can be managed without the need for the business to try and maintain such in-depth domain expertise. Moving away from spreadsheets to a system based on data consolidated from all employees and using direct expense data indicated via electronic credit card records means that a small or mid-sized business can see where expenses are being accrued, can look at how these are trending and can gain far greater insights and control over what is happening - reducing costs and providing a faster and more accurate claims approval and payment system to their employees.
To download this paper you must be logged in.