Answered.
Expense management is how a business manages the process of claiming, paying and auditing expenses initiated by employees on behalf of the company. It includes policies, systems, governance and analysis of expenses.
Expenses are often one of the largest business costs so successful organisations are focused on making sure they are controlled, monitored and incurred only in support of business growth.
Employees may claim expenses for anything that they needed to buy themselves in order to do their job. These purchases may typically include travel, accommodation, subsistence, client entertainment, supplies, subscriptions or technology and telecommunications, such as mobile phone bills.
Expense management starts with policy and procedure. Companies usually have policies and procedures in place to manage the claiming, processing and payment of expenses.
Expense policies should be clear and easily understandable. They set out which expenses employees are allowed to claim for and which are not acceptable. They may stipulate suppliers, spending limits, classes or modes of transport allowed. There may be different limits and controls for different business situations. The expense policy should also explain the process employees should use to reclaim expenses. This might mean filling in forms, submitting expenses online or using a digital system or app. The process will require original receipts or images to be submitted. Most firms ask for a business justification and the expense may need to be coded to a particular cost centre or project.
Expenses management teams need to review and report on expenses claims. They need to check for approval before repaying expenses. It’s usually a line manager’s responsibility to authorise expenses claims for their direct employees and contractors.
Expense management isn’t just administration: it’s a strategic finance activity. Growing businesses understand that expenses are an essential investment cost to help build customer relationships and increase market understanding and access. Connecting the expenses with the project or account they’re supporting means that finance managers can work out the ROI of expenses. With good expenses data and full visibility of spending, teams can forecast expenses costs and plan budgets.
Modern expense management tools streamline and automate expense management. From mobile apps to make it easy to upload receipts and claims on the road to integrated travel booking and powerful analytics, expense management software can speed up the expenses process and reduce manual workload for employees and expenses teams. By analysing expenses spending in relation to customer accounts and projects, the business can make sure the right suppliers and agreements are in place to meet demand and support employees to travel and work wherever they need to drive revenue growth and profitability.
