Expense reporting for small business
It can be exciting launching and growing a small company, but often one of the major challenges faced by small business owners is dealing with all the other issues and processes that also need to occur as a part of running a business.
From picking the right accounting software to ensuring that the right employee processes and workflows are in place, the different challenges a business faces not directly associated with the core function of the business, can be huge. Not only can additional admin stretch business owner’s time, but managers and employees and even freelancers can often find themselves spending resources on administration and processes that distract them from conducting the roles for which they were hired.
This administrative burden is why it is vitally important for a small business to streamline their business processes. Ensuring the right tools, software packages and services are in place will support and reduce the administrative toll on the team.
There are a wide range of different areas within a business that can cause excess administration, but one common issue that most businesses struggle with is employee business expense management. Typical problems that employees grapple with when it comes to expense tracking when using a manual process are:
- Tracking business and travel expenses is time consuming and requires a lot of administration both by those filling in expense reports but also by the team members who must check and authorize them.
- Many companies start out by using Microsoft Excel templates, or something similar, but this can cause the potential for data entry errors in expense forms.
- Employees might have to wait for expense reimbursement into their bank accounts and if expenses are put on credit cards, additional fees may be applicable. Some staff members may also run into budgeting and cash flow issues on their own personal finances if their expense claims are high and there is a delay in recouping the money that is owed to them. Sometimes expenses are payable at the date that the monthly salary is processed by payroll, which can be financially problematic for some individuals.
When it comes to the challenges that small businesses face these can include:
- A lot of administration and paperwork surrounding the checking and paying of expense claims. Paper receipts stapled to an expense print out can cause a huge amount of administration to process and sign-off.
- Issues surrounding lost records or even fraudulent transactions. When dealing with paper receipts it is easy to mislay and lose the evidence of a business expense. This can happen at the employee level, but it is not unheard of for managers, accounts, or HR teams to mislay the form. This can lead to lost money for the employee or at best a delay in reimbursing the expense, and additional time and trouble tracking down and resolving the issues.
- You might have solved the problem of reimbursing employees using their own bank accounts by deploying a corporate card for expenses. This can help but does not solve the problem of overspending on expenses. In some cases, giving employees a corporate credit card can make matters worse when they are not dealing with their own money initially. Overspending on expenses can be another area where employees, through no fault of their own, end up spending more money on their business expenses than they might need to if there was an automated, central system in place for purchasing certain forms of business expense.
Benefits of using an Expense Tracking Solution
So, you have come to the decision that you want to improve the way your small business deals with expenses and are looking for an expense management solution, what sort of functionality should you be looking out for?
One of the key issues that businesses must deal with is burdensome administration that takes a lot of time to process, so any expense system that allows you to automate expense management would be advantageous. Many systems can operate in real-time, and the advantage of automation is three-fold. Not only does it speed up the expense process, but it also saves on administration, which in turn saves money.
Another thing to look out for is an expense tracker package that will connect to your accounting system so that you do not have to manually align the data in two different tools. It is one thing to track expenses more effectively, but accounting teams also need to have an expense tracking software system that streamlines their processes and one that does not create more work for them. This process falls into the remit of Enterprise Resource Planning (ERP) - where suites of applications work seamlessly together.
You should also look for a system that can provide employee reimbursement automatically based on a pre-approval process, or by following a set expense policy that is set out in advance.
The best expense systems are not device specific. They work not only on desktop devices in the office, but also on mobile devices when out on business; making it much easier for employees to file and log their expense claims as they go, quickly and easily.
Often many expense solutions are for enterprises and are not cost effective for smaller organizations. However, some expense solutions can adapt to the needs of smaller businesses and offer competitive pricing, such as the tools and solutions from Egencia.
Look for integration with travel management solutions. One important aspect that is often overlooked is that one of the most used expense categories is business travel related. These travel related expenses can come from employees racking up expenses when conducting their day-to-day business activities, or from travel that is booked in advance, either by the employees themselves or via HR or administration teams.
Certain expense management software solutions can combine both expense management and connect to travel management systems. This not only saves time, but also money on booking travel, since some of these travel management solutions can offer preferential rates, which are more cost effective than if the company or employee booked directly.
Egencia's Expense & Travel Management Solutions Can Help
Egencia can help your small business make savings on business travel, expenses, and invoicing. You can manage travel and expenses (T&E) with our simple to use reporting systems, which help keep all your expenses consolidated in one place.
Egencia's Travel Management solutions can be used to support your existing employee expense reporting and reconciliation processes. Our tools and services can integrate into your existing systems to help automate and simplify your travel management. In addition, you can get it all correctly reconciled into your general ledger. You can also get daily visibility into your travel expenses so you can always keep on top of your expenditures.
Some of the benefits from using Egencia include:
- Save money - Egencia can help your small business reduce business travel costs with every booking.
- Save time - Egencia makes booking corporate travel quick and easy. Travelers can use the phone, our mobile app, or go online to book travel quickly and easily.
- Get better expense insight - If you like data, then we have you covered. Egencia Analytics Studio can provide a wide range of reports covering travel spend, traveler adoption and even travel policy compliance.
- Reduce traveler risk - We also provide a comprehensive suite of travel risk management solutions so that you can mitigate travel risk and provide duty of care.
To learn more on how you can streamline your business expenses and travel management contact Egencia today.