You didn’t go into business so that you could waste hours every month on employee expenses management. Yet you won’t be able to build your big idea into a profitable business unless you get certain basic things right.
Employee expenses (including your own) can be a financial drain, if not managed correctly. Luckily, there are a few key tips you can follow to make sure that employee expense management takes place smoothly (and cheaply), so that you can get back to focusing on your core business, and reduce the impact of expenses on that critical bottom line.
Employee expense management can’t wait: start today
Whether you like it or not, employee expense management matters. It’s not something you should fudge your way towards each month. You should develop a plan early on in your business, so that you don’t run into trouble later.
The nature of the beast is that employee expenses can be a source of immense risk and stress. You can’t function if there’s uncertainty about the whereabouts of company credit cards (or cash), and you (or your staff) shouldn’t have to waste time on expense detective work, pouring through statements and trying to find out who spent what and why.
As an entrepreneur, you’ve likely invested personal money as well as time into your business, and you don’t want to be worrying about what’s happening to your precious funds. There’s no such thing as ‘just a few pounds here and there’ – everything adds up.
Accept the need for employee expenses
While you (as an entrepreneur) may be happy to scrimp and save on business expenses (cheaper hotels, homemade lunch), things may backfire if you expect your employees to do the same.
It doesn’t mean that you should give your employees free rein to splash out, of course.
It’s just about being careful to ensure that your employees are able to pay for everything they need in order to carry out their business (your business) to the best of their abilities. If you resent paying for certain expenses that are considered normal in more established businesses, your penny-pinching may backfire in the form of low employee morale.
Make sure you use integrated payment cards
There are two main reasons why you should make sure you have enough payment cards to hand.
Firstly, you don’t want to risk the frustration of having an important project grind to a halt simply because an employee isn’t able to make an essential purchase.
But the second issue relates to tracking who spent what and on what. If the entire company (or an entire department) relies on a single payment card, you’ll have everyone’s expenses on the same statement, and reconciling everything will be a nightmare.
In an ideal scenario, you’ll have one card per employee, and even one card for each department, or each regular purchase (e.g. online software). At the end of the month, all of your expenses will already be neatly organised by employee/category, rendering the reconciliation task minimal, and uncertainty non-existent.
Some banks will offer ‘purchasing cards’ to help you segregate your large regular expenses. Or why not try Soldo Business, the multi-user business spending account, which allows you to create prepaid Mastercard cards for employees and departments as well as for regular purchases? You can even create instant virtual Soldo cards, which are ideal for online purchases. The Soldo Business online admin dashboard then allows you to control each card’s settings and spending easily, as well as to create effortless expense reports.
Employee expense management software has come a long way
If you’re still using spreadsheets to manage your employee expenses, stop now.
Even if you think of yourself as a technophobe, you should have a look at some of the software that’s available now to help business owners manage their employee expenses. Most solutions are focused on being easy to use, and you’re sure to find an employee expense management system that’s a perfect fit for you and your business.
You may already be using a system like QuickBooks or Sage – why not revisit their websites to find out if they’ve added any functionality that might make employee expense management easier for you. Your business bank account manager might also be able to help with suggestions, so it’s always worth checking in. The right technology can make a huge difference.
Soldo Business offers effortless two-click expense reports, which integrate seamlessly with your existing accounts system. You can even generate reports by tags (e.g. ‘Client Networking’). Crucially, your employees can use the Soldo Business smartphone app to upload photos of receipts at the point of sale, so your reports will come complete with all the necessary information.
Then, once your reports are complete, you can go straight back to business.