A Guide on How To Streamline Business Expenses

Founders and MDs know that while business expenses are an important part of finances, they are also an area prone to corner-cutting. This is mainly due to the significant amount of manual work involved in all aspects of expenses-related procedures. This blog article will teach you how to streamline these processes.

If you’re still using a spreadsheet and paper documentation system, you’re hindering your business growth. You are wasting time and effort on tasks that are nothing more than manual labour. Why should your employees waste valuable time manually entering their expenses every month? Why expose your business to the risks of human error-driven damages? 

Instead, we urge you to adopt a more modern, smoother, and trustworthy approach, which will ultimately save you heaps of time and reduce risks. So, let’s dig into today’s topic: expenses and how to handle them effortlessly yet effectively. 

How Do You Streamline Expenses?

There are several ways to streamline expenses, and they work best when implemented together:

• Make the process clear and easy to follow;

• Digitise it;

• Use a centralised system;

• Automate as much of it as possible;

• Integrate your finance-related tools to work seamlessly together.

This is just a quick overview. Next, we will examine these steps in more detail.

Avoidance of Expenses

It’s a curious concept for many, but spending money can make your business more profitable. For example, an employee who pays to attend a conference or training session could gain insights that improve your profitability and productivity. Given that they are refunded and ultimately hone their skills, this sounds like a win-win. Yet many often avoid anything related to expenses. Let’s explore why.

Blurry Lines of Business Expenses

All too often, there is a significant reservation employees face when spending money out of their own pockets. Specifically, they worry about what can be claimed as expenses. In other words, employees may hesitate to spend money because they are unsure if they will be reimbursed.

The best solution is to develop a crystal clear expenses policy and ensure that every employee familiarises themselves with it. Keep it short, digestible, and easy to understand. We recommend including it in your onboarding process, so your company’s business expenses policy is delivered to new hires on day one.

The Struggle to Claim Expenses 

One in five workers admitted they don’t claim expenses if they think the amount is too small. Wanting to avoid the hassle of expense administration was the second most common reason for choosing not to claim expenses. This was followed by feelings of embarrassment about expecting reimbursement. Other common reasons included unclear or lengthy processes, employees not feeling entitled to reimbursement, or loss of receipts.

In summary, two key reasons are causing employees to hesitate in spending company money: the mindset and the process. Both are closely intertwined, and next, we will explain their connection.

Trust Employees to Spend Wisely

Expenses can drive your business forward, but employees need to feel empowered by a clear expense policy and procedures. Grant your workers the responsibility to spend within the terms of your policy instead of requiring close supervision by a manager. This will help make the process less burdensome.

A Foolproof Process

As an employer, you need to create a process that is smooth, quick, and has as few bottlenecks as possible. The less effort and thinking your staff needs to do, the more they trust the process. It will also translate into fewer mistakes they make and quicker reimbursements they receive. This approach can help prevent accounting errors and ensure that employees aren’t missing opportunities or going out of pocket because of a poorly organised system.

A clear process is a foolproof process. Not only is it easy to follow, but it instils confidence in employees, ensuring they are never at a loss. Thus, they have every reason to trust the system and are generally happy to adhere to the procedures.

Accessibility and Centralisation

Many employees don’t like dealing with expenses for reasons beyond a lack of clarity. For example, some avoid it because receipts are needed to claim the money back. This is usually a problem with paper receipts; they are easily lost and often cannot be submitted once issued.

The solution is to implement digital centralised document storage that is easily accessible across multiple devices. This allows your staff to submit their receipts on the go using their mobile phones. Moreover, since all documents are stored in one place rather than being scattered, the process of reclaiming business expenses will accelerate dramatically.

Automating Your Expenses System

Expense reports are a hassle for everyone involved at all stages of the process. This is often why they are error-ridden. Automating them minimises the number of steps required, leaves little room for human mistakes, and streamlines the otherwise lengthy process.

Online Expenses Management Platform

By investing in software that enables expense automation, such as Timesheet Portal, you will save more money than you spend. As we have already demonstrated, businesses lose significant amounts of money mainly due to ineffective expense claim approval processes.

When using Timesheet Portal, your contractors can submit online expense claim forms via their preferred devices. Then, they can have these approved by your clients, who may also do so on the go. You can choose to enforce a multistage approval process, granting more people visibility over claims before approval. The tool also features a mileage calculation based on postcodes, helping to avoid incorrect mileage expense claims.

Summary

The absence of an effective expense claim approval process can harm businesses in several ways. Ranging from financial losses to negative publicity and shifts in the office atmosphere, it presents numerous risks if left unoptimised.

The good news is that avoiding these dangers is relatively easy. In the era of modern technology, simply trusting the process to automation software will save you much more than the solution costs.

Are you tired of losing money through expense claims? Let us help you.