Expense management and reimbursement doesn’t have to be a pain point for your small to medium sized business. Automating expense management can not only save you tedious work, time, and money, but it can also safeguard your company’s finances.
Read on to learn more about why expense management automation isn’t just for large corporations, and 3 steps you can take to automate your expense management and reimbursement process.
How to Automate Expense Management
Do Small Businesses Need to Automate Expense Management?
Businesses of all sizes can benefit from automating expense management. Smaller businesses don’t tend to have robust accounting departments, and automations let your small team do more in less time.
The old way of manually processing expenses and reimbursement is time-consuming, and prone to error. Manual entry introduces opportunities for mistakes – or intentional overcharging. And manual expense processing means longer wait times for employee reimbursement.
Automating your expense management process is worth it for businesses of any size that incur employee-initiated expense.
Benefits of automating expense management include:
- Improving financial transparency
- Saving time and money on expense reports
- Improving job satisfaction by reimbursing employees faster
- Better enforcement of expense policies
- Reducing administrative burden
Many companies delay updating their processes because they worry about the time it takes and potential confusion in changing to a new system. Thankfully, it’s not difficult to automate expense management.
3 Easy Steps to Automate Expense Management
While it does take some set up to transition to a new expense management system, it’s worth the effort. Here are three steps you can take:
#1 Determine your expense policy
When you’ve been handling expense management manually, it can be easy not to have a strict policy and leave it up to whomever approves the expenses to decide what’s a legitimate expense. But having a well-defined expense and reimbursement policy can not only help you automate more aspects of the process, it can help protect your business.
When you’re looking to automate expense management, you need to define the following: What expenses are allowed? What margin (if any) is acceptable for exceeding expenses? What expenses are unacceptable?
Making an expense policy will help save you money by catching overcharging immediately, as well as increasing transparency for everyone. After all, an employee is less likely to expense a $200 dinner if the policy states a $100 per diem limit for dining, because then they know they will not get reimbursed for their dinner.
The more detailed your expense policy, the more automated you can make the process. Try to think of every scenario and set strict, but realistic limits.
#2 Choose an expense management software
The only way to automate your expense management process is by using software. Ideally, you should choose a tool that not only handles expense management, but other aspects of payroll, HR, and benefits. That way, you can use one platform for all of your payroll and HR needs.
With Commonwealth Payroll & HR’s Expense Management solution, employees and managers can submit, oversee, and approve expenses – even when they’re on the go. Employees get access to the status of their expense requests, pay history, and any necessary documents, that way they know exactly where their requests stand.
Choosing the right expense management software will make all the difference in streamlining your expense management process. And if you aren’t already using a cloud-based platform for your other payroll and HR needs, then you may want to consider an all-in-one solution like what we offer at CommPayHR.
#3 Configure your software according to your policy
Software cannot read your mind or anticipate your company’s unique expense management needs. That’s why you need to configure your expense management software so it better fits your needs.
The way this works is by setting up workflows. An employee incurs an expense, and then what happens? What information is needed to approve the expense? Who approves each employee’s expenses? What happens if that person is out of the office? And lastly, what kind of expenses do not get approved?
This is where your expense policy comes in handy – you will use that policy as a guide to set up parameters that can allow the software to automatically flag certain expenses for review, or automatically approve other expenses.
You’ll also want to connect any company cards and bank information to your expense management software. This allows for reimbursements to go through quicker, and without additional processing.
CommPayHR’s expense management solutions are highly configurable, and give you the power to track expenses and connect your General Ledger for faster reimbursement processing. Our implementation team works side-by-side with clients to customize the platform’s features to meet the specific needs of your organization.
Learn More About Expense Management With Commonwealth Payroll & HR
We invite you to view our recorded webinar that will help you take the first step toward streamlining your expense management system. By embracing modern expense management tools and best practices, you’ll empower your team, boost productivity, and drive cost savings that contribute directly to your bottom line.
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