How to Track Employee Spending: A Complete Guide
If you're a business owner, it's your responsibility to make sure that your employees are spending company funds appropriately – no matter how big or small your organisation is. It's not enough to simply trust that they won't steal from you; you have to be able to track their expenses efficiently.
In this guide, we'll talk about why business owners need to know how much their employees are spending and how they can keep track of employee spending. We also share what methods of employee spend tracking are most effective.
Table of Contents
- How to Keep Track of Employee Spending
- Why is it Important to Track Employee Spending?
- Benefits of Employee Spend Tracking
- How to Choose the Right Employee Travel Expense Tracking Software
- How to Get Started with Employee Expense Tracking in 3 Steps
How to Keep Track of Employee Spending
Managing employee expenses effectively is crucial for any business aiming to streamline operations and reduce manual workload.
Traditional methods, like using spreadsheets, often lead to a tedious and error-prone process of manually entering data.
However, modern solutions offer a seamless and automated approach to tracking employee spending. Here's how:
1. Transition from Spreadsheets to Advanced Solutions
Why move away from spreadsheets? While spreadsheets are a basic tool for tracking expenses, they require manual data entry, increasing the risk of errors and consuming valuable time.
2. Embrace Expense Tracking Apps and Cloud-Based Software
What are the advantages of using an expenses mobile app or cloud-based software? These platforms automate expense management, from receipt uploading to transaction categorisation, eliminating the need for manual data entry.
How do these tools simplify expense tracking? With features like automatic receipt upload via your phone's camera or a built-in scanner, these applications streamline the process. You can effortlessly organise expenses into categories by location or purchase type and annotate transactions with relevant notes.
Why is it Important to Track Employee Spending?
Understanding why tracking employee spending is vital can transform your organisation's financial management approach.
Here’s a breakdown of the impact on both internal efficiency and regulatory compliance:
1. Streamlining Manual Processes and Cutting Costs
How does expense tracking reduce manual processing time and costs? By obtaining precise data on employee expenditures, your finance team can swiftly approve expense reports. This efficiency not only lowers administrative costs but also reallocates employee time to more strategic tasks within your business, enhancing overall productivity.
2. Accelerating Employee Reimbursement
What's the benefit of quick expense reporting for employees? Streamlined expense tracking means faster reimbursement for out-of-pocket expenses, boosting employee satisfaction and morale.
3. Upholding Internal Policy Compliance
Why is monitoring employee purchases and travel essential? It ensures adherence to company policies regarding allowable purchases and travel, maintaining internal control and preventing policy violations.
4. Ensuring Compliance with External Regulations and Tax Laws
How does expense tracking help with regulatory compliance? Detailed monitoring of expenses guarantees that all taxes on employee spending are accurately reported and paid, helping your organisation stay in line with external laws and regulations.
Benefits of Employee Spend Tracking
Why Track Employee Spending?
In short, tracking what employees spend is very important for any business. It helps the company save money, makes sure rules are followed, and stops dishonest spending. It’s all about ensuring everything is done right and the company stays in good shape.
1. Save Money on Travel Expenses
Watching over travel costs helps you see where you can cut back. You’ll know if a trip is really needed and if everyone is spending wisely.
Impact: By analysing travel spending patterns, companies can identify opportunities for savings, negotiate better deals with service providers, and enforce travel policies that avoid unnecessary expenses.
2. Identify Issues with Travel Policy
Sometimes, employees might not follow the travel policy rules correctly. By keeping track, you can find out where the rules might be unclear or not working well.
Impact: This insight makes sure everyone knows and follows the travel rules, saving money and confusion.
3. Reduce Employee Expense Fraud
Impact: Early detection of fraud keeps everyone honest about their spending, which protects the company’s money.
How to Choose the Right Employee Travel Expense Tracking Software
Opting for a cloud-based system for employee travel expense tracking not only simplifies the process but also provides dynamic insights into your company's spending patterns, enabling better financial decisions.
Whether you're looking to control costs, improve efficiency, or gain real-time insights into employee spending, the right cloud-based software can make all the difference.
Why Use Cloud-Based Software for Expense Tracking?
Cloud-based software for tracking employee travel expenses offers unparalleled convenience and efficiency. With features like mobile app access, these systems enable real-time management and analysis of expense data from anywhere, at any time.
Benefits of Cloud-Based Software
Real-time monitoring: Finance managers can observe spending patterns as they happen, allowing for immediate adjustments to prevent overspending.
Accessibility: Access your expense data on the go, from any device, ensuring you’re always informed no matter where you are.
Efficiency over manual systems: Unlike manual tracking that relies on end-of-month reports, cloud-based solutions offer instant insights, speeding up the decision-making process.
What Features Should I Look For in Expense Tracking Software?
1. Effortless Integration with Key Business Tools
Your chosen software should seamlessly mesh with your existing financial ecosystem - like accounting and ERP software, for example - to ensure data flows without manual intervention.
Look for platforms known for their compatibility and integration ease, enhancing your workflow's efficiency. ExpenseIn's expense tracking software excels here, offering seamless integration with many of your favourite platforms.
2. Access to Instant Financial Insights
Choose software that provides comprehensive, real-time insights into your expenses, enabling proactive financial management.
ExpenseIn provides this with detailed, instant reports and analytics, enabling smarter, data-driven decisions for your business.
3. Simplicity and Accessibility for Every User
A straightforward, easily navigable interface that's accessible from any device, including smartphones, is essential for encouraging consistent use among your team. Prioritise solutions like ExpenseIn that are celebrated for their user-friendly design and mobile app.
4. Streamlining Operations with Automation
Look for features that automate tedious tasks, like receipt capture and expense approvals. ExpenseIn streamlines this process, offering smart receipt scanning and automated policy compliance, saving time and enhancing accuracy.
5. Uncompromised Security and Regulatory Compliance
Protecting your financial data is non-negotiable. ExpenseIn commits to high-level security and GDPR compliance, ensuring your expense data is secure and your operations meet stringent regulatory standards.
In your search for the ideal expense tracking solution, these features are non-negotiable for achieving streamlined financial management, enhanced decision-making capabilities, and ensured data security.
While many platforms promise comprehensive functionality, it's the execution and user feedback that truly differentiate the best in the field. Keep these criteria in mind to find a system that not only meets but exceeds your business needs.
Top Cloud-Based Expense Management Platforms
ExpenseIn: Ideal for businesses wanting to save time and money by transforming paper-based expense processes with a user-friendly mobile app, automated compliance, and more.
Webexpenses: Good for organisations looking for flexible receipt management and policy compliance tools, with easy accounting software integration.
SAP Concur: Suitable for large enterprises needing extensive travel and expense integration with advanced AI insights.
Spendesk: Great for teams desiring control over spending with virtual cards and real-time budget tracking.
Pleo: Best for simplifying expense reports and bookkeeping with smart cards and customisable workflows, especially for agile teams.
Each of these platforms comes with its own set of features tailored to different business needs.
For a more in-depth look at what each software offers and to find the best fit for your company, refer to our comprehensive guide on these cloud-based expense management solutions.
How to Get Started with Employee Expense Tracking in 3 Steps
Here’s how to get started with tracking employee expenses in three simple steps:
1. Select the Right Expense Tracking Software
Research and compare expense tracking apps that fit your business size and needs. Look for features such as mobile receipt capture, integration with accounting software, and real-time reporting.
In the expense tracking software, you’ll be able to select all the expense types relevant to your business, like travel, meals, and supplies. Focus on areas with frequent spending or high costs.
Tip: Take advantage of free trials to test software usability and features.
2. Configure Your Expense Management Software Account
Once you’ve chosen an expense management software, sign up and customise your settings.
Add expense categories, set up approval workflows, and invite your employees to join the platform.
Tip: Clearly define roles and permissions for all users to streamline the approval process.
3. Launch Your Expense Tracking Process
Kick off by conducting a training session for your employees on how to use the software.
Encourage timely submission of expenses - such as within a week of incurring an expense - and regularly review and approve submissions to maintain momentum.
Tip: Create a simple guide or cheat sheet that employees can refer to when submitting expenses.
More Tips for Optimising Your Expense Management Process:
Continuous improvement: Regularly solicit feedback from your team on the expense tracking process and software. Use this feedback to make adjustments that simplify reporting and approval for everyone.
Policy update: Periodically review and update your expense policy to reflect changes in spending patterns or business needs. Ensure all team members are aware of these updates.
By taking these steps, you set a solid foundation for managing employee expenses efficiently. This not only helps in controlling costs but also in making informed financial decisions for your business.
Interested in simplifying your employee expense tracking? Try ExpenseIn to see how our easy-to-use platform can improve your financial workflows. Book your demo now and take the first step towards streamlined expense management.