8 proven tips to improve expense management for businesses

Have your business spends increased recently? Is it becoming increasingly difficult to track receipts and manage your expenses? Have you noticed a drop in your profits due to unnecessary expenses?

Well, if your answer to any or all of these questions is a resounding ‘Yes’, this blog is a must read. Here, we will discuss some tried and tested methods to help you efficiently manage your expenses.

Take control of your business expenses and plug the leaks

Cap your expenses

The first and the most crucial aspect is to decide a maximum budget that you could allocate for expenses. Make sure that all the expenses are met within the budget instead of going overboard and spending more than your profits. You can also use an Expense Tracker tool to keep a track of your monthly or weekly expenses.

Organize expense related papers

Once you start spending within your allocated budget, the next step should be to organize the paper trail related to each and every expense you incur. Be it forms, invoices, or receipts, keep a rigid filing system and update it regularly. This will help you better manage your expenses and you will also get a tax benefit from each piece of paper. It is also advisable to keep digital copies of all these documents to make sure none of them are misplaced. Digital copies also reduce the physical space required to store all these documents, making it a more efficient method.

Keep your expense paperwork in one file

It is obvious that taking out a file every time just to store expense documents is a bit of work but separating them from huge stacks of files and documents will be a lot of work. It is better to file them separately from the start. Inculcate the habit in you team to maintain paperwork regularly and do this job in small chunks rather than let it build up into a mess. For better and easy management of expenses, you can also open a dedicated bank account, this will help with tracking as you will have a dedicated expense statement. An expense manager tool could be very helpful in this regard.

Financial discipline should be a core company value

Studies reveal that employees follow the behavior of their employers and emulate them in business related decision making. So as a figure head make sure to implement fiscal responsibility as a core company value to ensure all your employees follow suit. Sustainable spending, discipline in approval and quick reimbursements will spotlight your company values.

Standardize the process of expenses claims, approvals, and audits

Make sure there is a strict policy in place regarding claims, approvals, and audits of your  expenses. Your employees might need several things but all of these might not always be necessary or a priority. Make certain that there is only one way to request for an expense to ensure you are not bombarded by expense related emails, forms or even phone calls. There should be a standard protocol put in place to manage these activities.

Communicate with your employees

It is important to explain your processes to your employees. Discuss all the aspects openly and outline your expectations, set processes and tools for expense management to rule out any possibility for misunderstanding.

 This will give your employees an opportunity to be more creative and come up with cost-cutting solutions. You should also create a centrally accessible expense policy document to avoid confusion.

Reduce the risk factor

An employee may lose a receipt or another may ask for money for something that could hardly be considered as an office or business expense. Some may even use their own vendor contacts for business purchases. The risks are many and an efficient business owner takes the necessary steps to reduce these risks as much as possible.

You can start by automating your process, using an expense management software for receipt management, opening dedicated expense accounts, curating a list of authorized vendors, etc.

Use the power of automation 

Last but not least is automating your expense management process. It saves time, money and other resources spent on managing expenses manually. Furthermore, it also reduces confusion and saves the environment by reducing the dependency on paper. Automation also makes it easier for you to reduce unnecessary expenses and direct your resources to generate more profits.

Expense management is as important as revenue generation

Often in business tremendous importance is given to revenue generation, but any experienced business owner will tell you that responsible and sustainable spending is the key to the financial health of a successful business. Use the correct tools and automation required for you to maintain you business expenses efficiently.