How to improve expense management in five steps

Even the best-run businesses have room for improvement. Whether it’s improving productivity, boosting the bottom line, making franchisees’ lives a little better or forecasting budgets more accurately, there’s always something to do in a franchise business.

Matt Goss, managing director – Australia & New Zealand, Concur, a provider of spend management solutions and services, said, “Of all the issues in your business that require your attention, no one will ever ask you to fix your organisation’s expenses process. For many companies, a spreadsheet is considered good enough to manage expenses. However, while expenses may seem like a small part of your business, it’s actually an area that can have a significant impact on many others.

“Using a disconnected system, like a spreadsheet, means you’re missing an opportunity to address many of your business’ bigger problems.”

Five steps to fix your expenses

Step 1. Decide to fix it. After salaries, expenses are the second-largest controllable business cost. Yet many companies are not doing as much as they could be to control these inevitable costs. People may be resistant to change because they don’t want to swap something that’s good enough for something that they think could prove to be worse.

Start by assessing the quality and performance of your company’s current expense management process. Ask what’s preventing your organisation from automating the expense management system. Sometimes the answer is simply inertia. If you can get consensus and support from decision-makers, you can overcome inertia and make a difference.

Step 2. Make it easy for employees. It’s no secret that people are more productive when they work in a positive environment. Expenses can be emotional, especially when people are forced to comply with a policy they perceive as unfair. The best way to change behaviour, and to keep people happy at the same time, is to find the right balance between people, policy and compliance.

People generally want to do the right thing when they submit expenses. However, sometimes they just don’t know what the right thing is. A fair, clear and unambiguous expense policy is vital to prevent frustration, reduce mistakes and make life easier for everyone.

Automated solutions can help take the personal element out of expense management because the system is enforcing the rules, not managers.

Step 3. Turn policy into practice. Turn expenses policy into practice in a way that makes sense for your business. Get the ball rolling by keeping the expenses process simple, focusing on capturing relevant information and submitting, approving, and paying expenses on time.

Step 4. Go mobile. Mobile apps have already made people’s lives simpler. If employees can do their banking, take and send photos, and email files from anywhere in the world, they should be able to submit expenses the same way. This saves time and makes it easier for employees to comply with expense report deadlines.

Step 5. Put your data to work. When you spend a lot of money each year on business travel and related expenses, it’s important to know where this money is going. This lets you stay on top of cash flow and plan your future spending. However, you can’t make informed decisions without the right information. When you automate your expenses, you can access valuable data that gives you a clearer, more accurate view of your company’s spend. Then you can use this information to plan for the future.

Having access to solid data is one piece of the puzzle and what you do with this data completes the picture. Software alone is not the solution. Use the data from the system to inform policy-making decisions and drive behaviour changes that will deliver positive results.