By | Mark Sinatra | CEO Staff One HR
Expense reports that paint grim financial pictures. Endless hours wasted sorting through paperwork. Bookkeeping errors that eventually cost the company money—sometimes lots of money.
If any of the above problems are currently plaguing your business, then it might be time to look into expense management solutions (EMS): programs or applications that allow business owners to better keep track of (and correctly budget for) employee-initiated expenses.
There are a lot of systems out there that offer EMS to privately owned companies, and they’re all slightly different in their features and levels of functionality. When trying to evaluate whether a particular program is right for your business, here are three important questions to ask yourself:
“Does this program make it easy to transmit data from one format to another?”
How, exactly, does this program keep track of essential information? Will the user need to fill out a different form for every single purchase, or will they be able to keep a running tally for the duration of their project?
Will they be able to type in information on a smartphone or tablet, or will they require a company-provided computer to make notes? Is there an option to simply photograph receipts and bills and have your program automatically generate the relevant paperwork?
Some programs are a little more “high tech” than others, so it would be a mistake to simply assume that a program has a particular feature (or is compatible with other applications or hardware) without verifying so first.
Speaking of technology, it’s important to consider the age and computer-savvy of your staff. Millennials and members of Generation Z typically take to new technology like ducks to water, but folks born before 1980 might need a little extra help or guidance. Remember: if a program is so user-unfriendly that no one in your office can make it work, then as far as your company is concerned, it’s not very useful!
“How will this program detect and prevent fraud?”
If you were manually parsing an expense report and saw a $900 charge for a single night’s out-of-town lodging, you’d probably have some questions for the person who filed the report.
Unless you gave your employee explicit permission to crash in a presidential suite and order room service for every meal, that’s just not a reasonable amount to have spent on a hotel room. But because it is technically possible for a single-night stay in a luxury hotel to cost that much, would your program of choice still flag that charge as suspicious, or would it simply let the charge stand?
Also, if an employee is filing an expense report so that they can be reimbursed for incidentals, would the program notice if they submitted the same receipt multiple times? Or would it just tally the numbers, no questions asked?
Overstating legitimate charges and double-dipping are common ways that unscrupulous folks can defraud their employers; they either lump personal purchases in with true business expenses or seek compensation for more than they actually spent. And while the vast majority of folks would never steal from their employer in this manner, your expense management program needs to be able to catch any “bad apples” that would violate your trust.
“Can I customize this program to fit my needs?”
Exactly how specific do you need your expense reports to be? Is it enough for an employee to simply say that they spent a certain dollar amount on meals, or does every single cup of coffee need to be accounted for? What about the dates and times of the purchases? If a program will leave you frustrated with vagueness or overwhelmed with unnecessary detail, following up with your employees may wind up defeating the purpose of using the program at all.
Another aspect to look at is whether or not you’ll be able to create different parameters for different users. You may want to set varying expense budgets for certain clients and/or projects, grant some users greater freedom in documenting and editing records, or even limiting the types of expenses that are reportable (and thus eligible for compensation). Think of it this way: if you own a costume rental boutique and try to use expense management software tailor-made for law firms, then the software might not consider “laundry fees” to be a valid charge.
If all of this talk of EMS has got you feeling like you need an EMT, then we have good news: you don’t have to solve the problem on your own. Professional Employer Organizations, or PEOs, are firms that take on the HR needs of their client companies—and at Staff One, this definitely includes expense management solutions. So whether you need help finding a system that’s right for you, training opportunities to take full advantage of your current program, or just reassurance that your business partner’s monthly refreshment budget is way out of control, there are options out there for you.