An effective expense management strategy is vital to any business regardless of its size. However, developing a strategy can be challenging, especially if your organization does not have the right tools and resources.
Traditionally, expense management was a function of business that required heavy resource utilization, time-consuming processes, and cumbersome technology. Most, if not all, of these processes can now be done by business expense management solutions in much less time, with a fraction of the effort required.
Wherever your company is in its expense management journey, below are the basics that will establish a firm foundation for future expense success:
The first step to developing an expense management strategy is to lay out the standards by which it operates. There is no one-size-fits-all expense policy template. Financial leaders should ask themselves what their specific organization’s needs are for different teams, individuals, and departments.
What are considered reimbursable expenses? What are the per diems for marketing versus sales team members? What are the budgets for airfare, hotels, rental cars, or entertainment? Employees may be curious if they are allowed seat upgrades or options for business class, if they can use their corporate cards with certain retailers, or if they receive points or rewards with some carriers.
Employees must also understand what is non-refundable and how to document proof of purchase. Ideally, these policies are easily accessible to every team member and address their specific spending standards.
With the evolution of the global workforce, trying to catch up with every employee is becoming increasingly difficult. Antiquated systems and legacy solutions like expense reports slow processes down and create a backlog for accounting teams to deal with.
Using an expense management solution like Navan makes submitting claims for expenses much easier, especially when employees travel outside the office or work remotely. It begins with a smart corporate card that automatically enforces the expense policy above that you worked so hard to create. As soon as the card is swiped, the expense is automatically submitted.
And, with optical character recognition (OCR) technology, employees can immediately capture and upload photos of their receipts. Auto-itemization means claims are submitted line by line rather than accounting having to manually break down a receipt for its policy matching.
And, if the expense management solution automatically enforces the policy your company worked so hard to create — like Navan does — then expenses are automatically approved and filed.
Over the years, a simple glance at the world’s technology landscape highlights tech for travel management, expense management, and corporate cards. Which is excellent; we’ve come a long way. The problem: most of this technology is disjointed and does not connect smoothly for optimization.
Companies can keep receipts, data, and records organized by utilizing synergistically built solutions. Instead of multiple logins on various systems with numerous providers, centralizing data leads to streamlined management. Ditch the use of different systems with various logins so that data is centralized.
Consolidation leads to streamlined management as all systems are updated simultaneously, meaning real-time visibility powers smarter decision-making for cost controls.
When an employee books and pays for travel on the same platform, that expense is automatically reconciled and the expense is filed. A unified solution also means there is one hub collecting all that sweet business data, and there is no need to keep track along multiple platforms.
Slow processes, agonizing turnaround times, and unexpected out-of-pocket payments do not make for a good employee experience when it comes time to reimbursing expenses.
Employees expect reimbursements every time they pay out-of-pocket for company-related expenses. However, that spend often includes variable costs that companies may or may not classify as business-related.
After out-of-pocket spending occurs, it could take days or even weeks to get that money back into the employee's hands. Companies can ensure real-time spending policy compliance by implementing smart corporate cards with built-in policy controls. With controls embedded into corporate cards, out-of-policy spend is prevented before it happens. This allows employees to spend confidently knowing that their expense is within company policy.
And if a user has out-of-pocket expenses, implementing an auto-ACH (automated clearing house) program can link users' bank accounts to company funds after an approved transaction, meaning the reimbursement is also approved and can be moved over in as little as one business day.
With the right adoption and consistent application, the best practices of an expense process will save companies both time and money, all while improving employees’ experiences.
Moreover, having a best-practice solution that is easily deployable on mobile devices and desktops can leverage investments companies have already made in their existing technology stack.
And as companies scale, the technology behind their travel and expense policy should scale with them. With Navan expense, the policy is baked into corporate travel bookings and expenses. Users can easily see which hotels, cars, and flights are within their limits and manage them throughout the trip.
Whether on a business trip, working from home, or going into the local office, employees can easily spend what’s necessary to benefit the company, and leaders can feel confident their policies are controlling costs.