How do you manage team expenses?
In the corporate world, expense management is always a major source of frustration and tension. This applies to both employees (lack of autonomy, lengthy reimbursement process, expenses paid out of personal savings) and managers (budget overruns, lack of traceability of expenses, absence of supporting documents). The best way to manage expenses is to establish a clear internal policy and use appropriate software.
What internal policy should be put in place? What software is available to professionals? The range of software on offer has expanded considerably in recent years, so it's important to choose the one that best suits your company and your teams.
Examine your company's internal practices
Even before focusing on the various existing software packages, it is essential to examine internal practices and identify those that need to be modified.
Expense management: mistakes not to be made
Whether out of habit, simplicity or lack of time, internal expense management practices are rarely reviewed or called into question, even though they can be the source of a great deal of tension within the company. Among the practices to be avoided, five are particularly widespread:
Mistake n°1: a single card traveling from hand to hand
This is the most common practice, and is instinctively followed as the company grows. A business card linked to the company's expenses, but which has no specific owner and is passed on to different team members as expenses arise. This system entails several dangers: it makes it more difficult to trace expenses, increases the likelihood of loss or theft, and makes employees less accountable.
Mistake n°2: a single cardholder within the team
This mode of operation is the opposite of the previous practice. Here, the payment card is held by a single person, who is constantly called upon by his or her colleagues to manage their spending. This practice is far too rigorous, resulting in a loss of flexibility on the part of employees, and over-solicitation of one employee.
Mistake n°3: lack of expense control
Some organizations don't set spending limits on their bank cards, or don't specify spending limits by type of expense. This generally means that budgets are exceeded, making it difficult to prioritize expenses.
Mistake n°4: lack of expense claim management
Expense management is a key issue for CFOs. They need to have them in their possession and link them to all expenses. If there is no process for recovering these expense reports, the company will not be able to justify them to the tax authorities. If the employee has advanced this expense, he or she cannot be reimbursed.
Mistake n°5: personal advances by employees
In many organizations, it's up to employees to advance money for business expenses, which they are then reimbursed for. This practice can be a source of tension and stress for employees. It should be avoided.
All these practices are widespread, and are the ones we instinctively turn to. An internal expense management policy is needed to ensure that business expenses are properly managed.
Setting up an internal policy
The first point to work on is setting up a budget. It's impossible to manage expenses and empower teams without a budget. It is possible to categorize it by type of expense, which will give the CFO a clearer picture. Once the budget has been drawn up, it is easier to set spending limits for the bank cards issued to employees. The key to this practice is to set a budget that limits waste while enabling your employees to succeed in their missions.
Once the budget has been set, internal processes need to be established to allow information to flow and to standardize techniques. Why use the same process for all employees? To improve efficiency and communication between departments. The multiplication of working methods implies areas of friction and poor communication between employees. Make sure you communicate this change of process properly, and make sure that newcomers are made aware of it too. Note that the same internal process does not imply the same method of payment for all employees. You can still diversify payment methods.
Whether it's a question of budget, method of payment or internal company processes, this is mainly the part that affects your employees, but there's an important part of spending that hasn't yet been tackled: expense accounts. These concern your CFO and your finance team. Recovering and sorting expense reports is an administrative and repetitive task, which is why it's important to think about it in advance to relieve your teams as much as possible. Centralize the retrieval of expense reports and equip yourself with an application enabling your employees to dematerialize them.
Note that even if your employees take photos of their expense reports and attach them to their expenses, they are still obliged to provide you with the paper document.
Last but not least, set up anti-fraud systems. The obligation to add a receipt to every expense allows you to visualize expenses, ensure that the same receipt is not used several times and thus limit fraud.
As we have seen, there are a number of points that need to be taken into account to optimize the management of pro expenses. A wide range of tools and software are now available to help companies save time and money.
Finding the right tools
The tools on which professionals rely must address two issues: payment methods and accounting management of business expenses.
Payment tools
The most widely used payment methods are debit and credit cards. They empower employees and ensure traceability of expenses. However, different types of card exist, so it's important to differentiate between them to find the most suitable format.
The first and most common type is the physical payment card. This is the classic format to which all employees are accustomed.
The second is the virtual card. It works in the same way as the physical card, but is used for online purchases. So why opt for a virtual card? Loss or theft of a standard bank card is common, but this is almost impossible with a virtual card. For software purchases or subscriptions, the physical card offers no particular advantage.
Do you need physical payment cards for your sales force and virtual cards for the rest of your staff? No problem, many companies offer both payment methods. The neobank Qonto, for example, allows you to order multiple cards, whatever their form.
We've distinguished two forms of payment card here, but the card used by your employees isn't just a bank card - it's usually a business card.
Each business card can be given a personalized limit. This makes it possible to manage the allocated budget very precisely, and gives employees a great deal of autonomy. There's no need to refer to your manager before incurring an expense. However, this does not exempt employees from justifying their expenses. They must attach invoices to their transactions and hand them over to the person in charge.
The issues of expense reports and accounting must of course be taken into account when tackling the subject of business expense management.
Business expenses and expense reports
While debit and credit cards can be used to keep track of payments, they are not enough for tax authorities. Every business expense must be justified, and an invoice must be attached to it. Today, many software programs enable your employees to take photos of their expense receipts, but they must also return the paper version to you.
What's the point of this software? They reduce fraud, cut the time spent filling in coupons to justify purchases, and centralize information for the finance team.
The reduction in fraud is linked to the obligation to take a photo of the invoice for each expense. This makes it much easier to spot expenses without an invoice, or duplicate invoices.
Time spent on administrative tasks is reduced , as employees are asked to provide very little information. All they have to do is make their purchases and photograph their receipts. No paperwork to fill in back at the office, and no additional documents to bring in.
Less paperwork by employees means less paperwork for the finance team to sort and read. What's more, using the same software for all employees ensures the same working method and centralization of all data. This simplifies the processing of internal requests.
In addition to the dematerialization of expense claims, these programs often enable accounting exports. You can then transcribe the flow of money into accounting entries.
The Qonto application, for example, enables you to take photos of your expense reports, set up personalized labels for each expense and perform accounting exports.
Depending on the needs of your company and your teams, it's essential to compare the different software packages on the market. Auditing the needs of all your employees is the first step in choosing the right software. All you need to do is conduct a market study and select the most appropriate software.
Article translated from French