Expenses and business activities go hand in hand. In order to ensure that the project or task is beneficial, the organization should incur cost of acquisition.Some of the most crucial expense management best practices that benefit an organization and show visible positive changes.
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Expense management
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Expense Management
Best Practices
Introducing Expense Management Best Practices
Expenses and business activities go hand in hand. In order to ensure that the project or task is
beneficial, the organization should incur cost of acquisition. Expenses are to be managed in an
efficient manner in order to make the best out of the resources. This directly leads to ensuring
proper result achievement. Some of the most crucial expense management best practices that
benefit an organization and show visible positive changes are as follows:
Clearly define the expense report program
Expense management can be a very tedious and complex process of management. Especially if a
person who is not well-versed with the technicalities is responsible for monitoring it. An expense
reporting program should be clear when it defines the kind of expenses and expenditures that fall
under the category eligible for reimbursements. Expense management includes only those
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expenses which are in association with the business. It is important to remember that they do not
involve your personal expenses. Moreover, the organization and department should incur these
expenses only during the process of business activities. Bottom-line, the expense report program
rules and regulations should be simple, clear and ambiguity free.
Keep is short and crisp
Your expense management procedure should not exhaust your employees with long and tedious
efforts. It is best to keep the procedure as simple as possible. It is not mandatory that a good
management system should be long and keep your employees waiting for acceptance approval.
Make sure to only ask for those details which are necessary for managing business expenses in an
effective manner.
Simple submissions of expense reports
The organization should develop a simple and easy method wherein the employees can submit
their expense related reports. By reducing the amount of paper used in submission will increase
the accuracy, efficiency and speed of reporting and submissions. By making use of paperless
modes of submission will be easier and quicker than paper-based.
Timely payment mechanism
If the employees are submitting their expense reports in a timely manner, it becomes your moral
obligation to respect their diligence and have a system in place to reimburse their expenses in a
timely manner as well. In order to do this, it is important to remove the multi-layer approval
process and allowing the reports to pass a wide array of parties.
Clearly define your expense management policy
Before you go ahead with establishing a strong foundation for expense reporting and
reimbursement submission, it is important to make the expense management policy loud and clear
to the employees in the organization. Always lay special emphasis on defining a clear and
unambiguous expense management policy. It is, without a doubt, one of the most important
practices of any organization. With clarity arises improvisation and better performance. Therefore,
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the duty of the expense manager, CA, Auditor or accountant is to ensure that the expense
management policy is clearly communicated to all the employees within every vertical and
function of the organization.
Therefore, with an effective expense management best practices system in place, the organization
can effectively categorize expenses that may quality as tax write-off according to the IRS
guideline.
Further Reading
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