An expense management system is a way to make expense reports easier for employees and managers. An expense report is mandatory report for every employee that spends money of the company. To prevent fraud, every expense is audited and accounted for. For the company and for when the IRS visits. Usually a company would either use the traditional way of making expense reports which is the manual system, or they could use an expense management software. Either way this article will help with the best implementation of the system. Even if you have to most efficient system or software, the execution is still an important aspect for successful expense reports. It might not be proven effective for every company but here are the compiled steps to implementing a successful expense management system.
Choose the Software Wisely
In the current expense management processes, 42% of companies use an entire manual process while only 24% use a fully automated system. These numbers are according to Travel & Expense Management Benchmarking done by PayStream Advisors. That is a lot of number who still rely on the manual process. Using expense management tools has lots of advantages like saving money and time, quicker reimbursement, able to submit and approve reports even outside the office and increase in policy compliance. With these benefits, more companies will find themselves switching to the automated system. But not any software will do, you have to choose the software you will use wisely. You don’t want to switch from an effective system, even though it is manual, to a more complex system which might not help you at all. There are articles written on how to choose the perfect expense management software for your company. Do your research and follow the guides. Another thing that would help is to read expense management software reviews to know which software will fit all your business needs.
Make or Update the Expenses Policy
When you have chosen the software that you plan to use, the next step would be to make an expenses policy. This will be the guideline that the employees and managers will follow to know where and when they can spend company funds. If you already have an expenses policy made, review it to make sure that it is up to date, if not then it is time to update your policies. Policies are in place so that:
- Employees know what the rules are regarding company funds. When they travel, they should know what is being shouldered by the company and what they have to pay for themselves. The policy will also state the maximum amount of money they can spend on a particular product or expense.
- This will also be the guideline that your managers and finance team will follow to reject or accept expense claims. Having an automated expense system will automatically reject and accept claims once the policies are programmed in the software.
- The policies will help control the expenses and costs that the company has to pay for. The senior management will be able to calculate the expected expenses of those who are traveling and put them in the budget.
Set Up the Data
One thing that companies are prone to do is to automate what they are already doing. That is alright if the current expense management process is working great but if it is a bad process, then you have to assess and make changes. Before you set up the data, make sure that the process you are automating is a great process and will work for a long time. Once the policies and regulations are made and you have a process that will work for the whole of the company, you have to input the data to the software. Another tip is to keep the process simple. You are automating the system to make the process easier and more manageable to the employees. That won’t happen if you have tons of requirements for the employee to accomplish. Keep the process as short and simple as possible.
Learn to Use the Software
If you want your entire company to adapt a new system, you have to learn how to use it. You can’t implement a new system without fully understanding how it functions, how all the features are used. A tip would be to stick with the old and learn the new before fully switching to the new system. There are service providers that will offer free trial, take advantage of these offers. Read reviews of expense management software to know which software vendors will offer free trial. You can appoint someone to do all the trials and to decide on which software to get and how to go about with it. Or you can do all these things on your own. Getting the top expense management software is a big decision, so don’t take it lightly and do all the necessary preparations before implementing it.
Appoint Someone to Decide
Like what is mentioned above, you can do the decisions on your own or you can appoint someone to do all the decision making when it comes to the new expense management solution. There are decisions to be made, like which software to get, how much money to be allocated for the new system, who will do the training and teaching of all the employees and who will maintain the system. These are just a few of the decisions that have to be made when automating a process. You can assign one of the managers in charge of auditing expenses or one of the senior management levels, anyone that will have an idea on what you want the process to be. The decision maker will be the person responsible with all things related to the expense management process.
Teach, Train and Support
You have chosen a decision maker and have chosen the perfect expense management software. It is time to involve the whole company. But first, you have to teach them how to use the software. There are also software vendors that will offer free training for the company. This is a great bonus. Read expense management software reviews to know which companies offer free training.
Shelly Frost of SmallBusiness addressed the importance of training in the workplace. One of which is improved employee performance. If you want your employees to excel in making expense reports, proper training and support is needed. Changing the system is already a difficult process; make it easier for everyone by offering the support and knowledge they need to be consistent in their jobs.
Audit Expense Claim
Even if you have the top expense management software, your managers still have to audit the expense claims of all employees. According to a study conducted by the Association of Certified Fraud Examiners, 5% of all revenues of a company are lost due to fraud. Fraud is committed when employees submit false documents in the hopes of getting more money. This can be prevented by auditing carefully and meticulously all receipts and claims that are forwarded to the managers. There are websites that can make fake receipts, so it very important that all expenses are verified. There are expense management software that will automatically reject expense claims if they are higher that what is set in the policy. This is very helpful in finding out fraud especially if costs seem to be extravagant and obviously in violation of the policies but auditing of claims is still very important.
Pay Your Employees
One of the main reasons why the expense management system is being automated is to streamline the process. Managers and employees alike want to make the reporting and approval quicker so they can get reimbursements in a timelier manner. According to the survey results of the Corporate Travel Card Benchmark, the entire process of an expense report takes 76 minutes when done manually. While it only takes 35 minutes with the use of the automated system. That is a lot of time saved but it would all be useless if you do not pay your employees on time. Ideally payments should be done once a week as long as their expense reports are done, submitted, audited and approved. It used to be that expense reports are processed in a month because of the manual process but the automation has helped the process become more efficient. If you want a successful implementation of your new system, then you better reimburse on time.
Monitor For Problems
You shouldn’t relax a few weeks or even a month after the implementation of the new system. These first few weeks will show you if there are potential problems in the new system. Be in touch with the employees and ask for feedback. It is better to catch the problems earlier rather than to continue with the process and have problems in the long run. The software vendor should offer you their support in case any problems are found.
Implantation is just as important as getting the perfect software. Many companies are successful in their implementation while others are floundering. If you also want to have an effective implementation of your expense management system just follow the steps mentioned above.
Want to know the best expense management software for your company? Visit CrowdReviews.com for users’ opinions and reviews.
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