Smartest Theories on Expense Management

Managing costs is a crucial task for any company with more than a handful of employees. The vast majority of workers will have at least a few invoices to submit for reimbursement in any given month, regardless of whether the expenses were incurred while on the road, at home, or at the office. In the past, this procedure’s management required several signatures and approvals from various managers and executives.

Increasingly, companies are using software to automate these steps, which not only simplifies the process for everyone involved but also speeds it up and improves its accuracy.

In the context of cost management, what does the phrase “Workflow” refer to?

From the time a receipt is submitted into an organization’s cost management system until the time an employee is reimbursed or the charge is paid by the organisation, the whole process is described in detail by a workflow called expenditure management.

It’s a systematised process that may be used for any kind of spending and that details the steps involved in approving, authorising, and paying for an expense. The use of expense management workflow is important here.

Why Does Expense Management Require a Workflow?

If a company does not have a set procedure for managing employee spending, it will have fewer alternatives when it comes to receiving, accounting for, authorising, and reimbursing employee expenditures.

An unorganised method of expenditure management may be acceptable for a small business with a few employees who are responsible for submitting their own charges. However, in order to keep up with the needs of an expanding organisation, an automated approach of managing this aspect of the business is necessary.

Creating a standardised procedure for all expenses helps firms save time, reduce errors, lessen the likelihood of fraud, and gain a financial advantage.

When and why is an Expense Management System required?

All businesses must have their bills paid promptly to keep operating. Any company with employees doing work beyond the company’s “four walls” must practise rigorous budgetary control. Every business must address this need. Expenses, even for something as commonplace as an employee eating lunch on the company’s dime with a client, must be itemised, authorised, and then refunded to the employee who paid for it.

Businesses may provide proper refunds in a timely manner if they have effective processes for controlling their costs in place. For an employee who has paid for a service or item out of their own pocket, waiting several months to get reimbursed is very inconvenient.

Illustration of an Expense Management Workflow

Get together all of the documentation. If an employee is submitting an expense report for reimbursement, it is his or her responsibility to gather all relevant documentation, such as purchase receipts, credit card statements, invoices, and so on.

The accounting staff, the supervisor, and/or management will utilise these records to verify the authenticity of the expenditures and determine whether or not they are legitimately reimbursable.

It is up to the worker to compile the report. The employee’s report, which will include one or more costs that will need to be scheduled for reimbursement, should include a reference to the company’s policy on the management of spending.

To serve its role as the primary proof that an employee would use to make a claim for expenses, the report must typically be filled out and submitted monthly.

Provided in its final form for evaluation and approval

When the report is finally turned in, it will be reviewed by a direct supervisor and a member of the accounting team to check the accuracy of the claims.