Getting to Grips with Expense Management
Business expansion is critical for organisations seeking to remain competitive and profitable. And a natural part of expansion is to take on more staff, developing new roles and expanding your team’s scope in attracting and retaining customers. But taking on staff brings with it a whole host of employer responsibilities and you will need to make sure you have all the relevant systems in place before you begin any programme of recruitment.
Payroll, taxation, National Insurance, bonuses, holiday pay, sick pay… there are so many things that need to be addressed for each employee. Something else you may need to consider, particularly if you have a large or remote sales team, is expenses. Any type of business travel or business cost can be claimed back, and you need to ensure you have a robust method of establishing, collating, processing and paying expenses.
Set your policy
You will need to set out a company policy as to what constitutes an expense and put reasonable limits in place. For example, if an employee has to travel you will need to pay their train or air fare, or cover their petrol costs. But you also need to consider things like meals during business trips, hotel costs and taxi fares. You may wish to establish a list of preferred suppliers, so for example have a list of hotels which your employees can choose from. This will set a ceiling on price and avoid anyone staying anywhere overly expensive.
Some places will come to financial agreements with you if you offer a certain amount of business. So if you are setting up a list of preferred suppliers, from hotels to taxi companies, you may be able to negotiate a better price with them if you assure them of repeat business. This can also help with expense management and logging, as your finance team will only be dealing with a certain amount of organisations.
A range of options
Employees will need to keep receipts for everything they want to claim back on expenses. There are a number of ways you can manage an expense account. Some companies choose to simply repay their employees anything they have presented a receipt for. Others offer company credit cards, so the employee doesn’t need to pay anything themselves, or make any claims. Or you could choose to build in a certain amount of expenses to your employee’s salary, for example giving them a car allowance as part of their monthly payments.
Keeping track of expenses can be tricky, especially if you have a lot of employees claiming for different things. In this case, you’ll find that an expense management tool has uses and benefits that are second to none. You can use this software to easily manage all of your expense needs, from logging and checking to processing and paying.
Your employees are entitled to expect reasonable business expenses to be paid, but it’s up to you how far you take it. While travel, food and accommodation are standard payments, you could offer extras in terms of drinks, entertainment or leisure during their business trip.
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