Expense Management Policy: Definitive Guide with Free Template

This makes it easy for Finance teams to audit expense reports before processing reimbursements. This also eliminates the need for storing stacks of paper receipts and worrying about their safekeeping. The expense management process is the steps through which employees request reimbursement or provide details of expenses made in carrying out work-related tasks.

The most common pain points from T&E management come from outdated policies and manual inputs, which you should seek to update and simplify via means of a robust expense management platform. Furthermore, by integrating your TEM system with your travel management system you can instantly take the travel booking information and add it to your expense reports. Pluto card management software will also give you more control over your corporate spending. Plus, you’ll be able to set and control your spending limits with much more ease. One of the best ways to simplify your travel and expense management is by making use of the right T&E management software. However, with the increasing amount of options available, knowing which one fits your company best can be difficult.

What to include in an expense management policy

For example, an electrician might have to factor in costs such as tools and vehicles, whereas an accountant might need to pay for computer equipment and office rent. Both businesses could also share common expenses such as insurance, staff wages, and marketing and advertising costs. Managing expenses can be a difficult task, especially if you’re processing expenses from multiple employees. Without a proper system in place, you will quickly find yourself becoming confused with the number of receipts. It can be hard to establish an audit trail if expenses aren’t processed immediately, and finding the time to process expenses as they come through can be equally difficult when you’re a small business.

You can also set up expense policies to differentiate between allowable and unallowable amounts for any expense category. Unallowable amounts are amounts that exceed the daily allowance for an expense category. This portion of an expense is allocated to a separate object and subsidiary account that you set up when you map expense accounts to expense categories. When it comes to managing your business expenses, Cashplus offer an ideal solution with their prepaid expense card. Prepaid cards mean you don’t have to use petty cash or personal funds to cover your business expenses or rely on employees to cover the costs before you can pay them back. Effective expense management ensures that expenditures are controlled, budgets are adhered to, and resources are allocated efficiently.

Switching to expense reporting software

Businesses, especially in the UAE, usually use spreadsheets to manage their expenses and reduce dependency on paper receipts. Some common spreadsheet software is Microsoft Excel, Google Sheets, and Zoho Sheets. Employees collect paper receipts and submit them to the accounting department for approval monthly or quarterly.

It could involve filling out an expense claim form or entering data into the expense management software and sending it to a line manager for approval. The second step is on the part of the accounting departments, and it includes auditing and analyzing data submitted, getting support, and making payments. After expense reports are submitted, they might require management or auditor approval.

Integration with accounting software

The purchase of a capital asset such as a building or equipment is not an expense. Hence, as part of their digital transformation strategy, they shift towards using expense management solutions to record, verify and manage employees’ business expenses efficiently. expense management definition If you don’t know, digital spend management will dramatically strengthen financial accountability, budgeting, and expenses. In addition, reporting on where company funds are flowing makes it much simpler to see how different department heads oversee budgets.

• This will help cut down on invalid expense applications, which will reduce your admin and free up more of your important time.
• Additionally, insight into historical data enables you to analyze your organization’s financial needs better to make data-driven decisions.
• Expenses are generally recorded on an accrual basis, ensuring that they match up with the revenues reported in accounting periods.
• Moreover, proper expense management ensures compliance with financial regulations and enhances transparency in financial reporting.
• An expense management software can be a real boon when it comes to credit card reconciliation.
• Whether you use Zoho expense, SAP Concur, or Quickbooks, your accounting software can integrate directly with Pluto’s platform.

This ensures that a truly one-click experience replaces the otherwise tedious manual expense reporting process. With JD Edwards EnterpriseOne Expense Management, you create and customize your expense reimbursement policies according to the type of expenses incurred. For each type of expense, you establish expense categories that you can customize to track pertinent information. For example, you might set up an expense category for airfare, and then further customize it to require the employee to enter a ticket number, ticket status, subledger, and so on. As you set up the expense categories in a policy, you can further define daily allowances or per diem rules, policy limits to require an audit, and rules for when a receipt is required.