11 January 2022
Managing expenses is a key component of running any business profitably.
Being able to see where (and when) money is going out of the organisation is essential to managing cash flow. Traditionally, it’s been a manual process, but the problem with this is that it’s labour intensive and can be prone to human error.
Implementing a software expenses system eradicates the need to dedicate hours of staff resources, so employees can be freed up from time-consuming paperwork.
It also removes the risk of mistakes or omissions that paper-based systems are susceptible to.
Expense management is the practice of tracking who is spending money on behalf of the company. It monitors what is being spent, where, by who and how much.
Policies, such as what expenses are allowed and how much per item, are usually set within the management of expenses, giving employees clear guidelines on the things they can claim for.
Expense management is vital because all businesses need to track what money is going out of the business.
Equally, employees need to be accountable for what they’re spending on behalf of the company, whilst being reimbursed as quickly as possible.
Using a digital platform like Expend allows you to automate the process of reconciling expenses. It frees up huge amounts of accounts time and makes the process simple. It provides real-time insight into expenses outflow so you can keep on top of your costs.
Some expense management suppliers have an app that can be uploaded to an employee’s smartphone so they can enter their expenses ‘on the go’.
They may also provide company managed prepaid cards which are used like a normal debit card. This means that staff aren’t paying for things out of their own pocket, perhaps leaving themselves short.
The cards can be used anytime, anywhere as well as at ATMs and work like a normal debit card. For additional security, however, you can set spending limits on the cards and prevent employees from withdrawing at cash machines if you choose.
Good expenses management platforms integrate with accounts software such as Xero or QuickBooks so your accountant is up to speed with your outgoings and has the necessary paperwork to comply with HMRC regulations.
Set spend limits for individual employees
You have the option to allocate free Expend prepaid cards to staff
After making a purchase, users upload an image of their receipt via the app. They add the relevant details, such as categorising the expense under 'office supplies' or 'software costs', or how they paid (cash, card etc.)
The claim is reviewed. If there’s a query, you can request further details or ask for it to be amended or clarified. If the expense falls outside the company’s claims policy, you can reject it
Within the app, you can chase employees for missing receipts with automated reminders at a frequency of your choosing, so your paperwork is always compliant
Approved claims are registered straight away with the accounting department and are integrated into the business’s overall accounting software for HMRC purposes
If you’re thinking of changing your expenses system, take a look at what Expend has to offer.
Disclaimer: This is not legal, accounting, or tax advice - it's simply a guide. If you need help, check with your accountant or contact HMRC directly.
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