Company Culture

Five Tips to Support the Completion of Successful Employee Spending

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Written by James Berenback • September 2, 2024

Five Tips to Support the Completion of Successful Employee Spending

Money. It makes careers, it makes enemies. Companies run on it and employees show up when it’s on the line. One of the most important financial practices in companies large and small alike is expense reporting.

Expense reporting describes the management and maintenance of purchases made on behalf of the company. When company employees must make purchases to complete their jobs, the company tends to pick up the bill. This might look like client lunches, travel to conferences, or even picking up a pack of pens for the office. These purchases must be managed through expense reporting, which holds each employee accountable for their purchases and gives the company an overall picture of what they’re spending money on — which can inform their work practices into the future.

So what’s the best way to manage expense reporting? We’re here to give you five tips to ensure that your company is setting itself up for a strong management system.

Automate the process

Humans make mistakes, it’s just in our nature. To avoid human error that impacts expense reporting, try automating the process. As with any other processes, automation exists on a spectrum — so even automating smaller components of the process can provide benefits for your company. This can even be as small as automating how receipts or purchases get categorized.

There are many platforms and apps that automate company expense reporting. Whichever one works best for your company, look for something that makes it easy to upload or enter expenses and also makes it easy for managers to approve expenses. Platforms should ideally give clear reporting too for a company-wide picture of what’s happening with employee purchases.

Create company-wide policy

The next way to engage in best practice when it comes to expense reporting management is to establish a company-wide policy that gives employees straightforward information and reference when it comes to their purchases, travel, or other expenses.

Company-wide policies should cover the following aspects of expenses:

  • What qualifies as an expense, including what is ineligible
  • How to claim a reimbursement
  • Who is eligible for a company card
  • What documentation is required for purchases
  • How to get approved for expenses
  • What happens if a purchase isn’t approved
  • Who to contact should an employee have any issues with their expense reporting

By giving employees a policy about expense reporting, all they have to do is follow the instructions and they won’t encounter any issues. Policy also gives managers accountability and something to lean on when working with their teams.

Make it easy for employees to be successful

Expense reporting can be intimidating for many employees — and that’s because there are horror stories out there about large purchases not getting reimbursed or people abusing their company cards to pay for inappropriate purchases. An expense reporting system that sets employees up for success is important, especially one that sets employees up for integrity.

Making the process transparent can be hugely helpful for employees, and making the process as simple as possible means that it doesn’t have to be a scary experience. Taking people’s experiences into consideration when writing company policy is one way to make sure that the management of expenses makes sense. It can also be helpful to support employees to report their expenses effectively by only requiring one entry for an entire trip or by providing them with admin support when it comes to travel booking.

Require approval before purchase

For companies that want to keep a close eye on employee expenses, requiring pre-approval for all purchases or travel is a way to give managers insight into what’s happening in their teams — and the ability to intervene should they believe that certain expenses are ineligible as a company expense.

When including a pre-approval requirement into company policy, it’s essential to be clear about when to submit a request for approval and what that process looks like. For example, does the employee need to send an email to their manager to complete a form? Does this need to happen a month before the purchase is made or only a few days? Pre-approval can also be useful for companies when it comes to forecasting expenses and knowing what receipts they’ll need to chase down to verify purchases.

Make expense reporting someone’s role

The last tip we have is to prioritize accurate and high-integrity company-wide expense reporting by incorporating the management of this process into someone’s role. By having a contact (or a few!) to answer questions about expense reporting, companies communicate to their employees that they value expense reporting that is correct and comprehensive. This also means that teams won’t have to scramble to adhere to policy and that companies can track budgets, forecasting expenses and planning ahead. While we recommend automation of the process, having a person to support this process and to answer questions is irreplaceable.

Successful employee expense reporting begins with clear policy that contains clear expectations and ends with automated systems that make it easy for employees to report their expenses.