How to track business expenses in 8 easy steps
How to track business expenses in 8 easy steps

Organizations can't succeed or even work efficiently if they have no clue how they form their budget. In modern companies, there is a multitude of ordinary expenses from business travel to the purchase of software and related expenses. Traditional manual systems of recording, tracking and allocating can leave financial teams struggling to assure the accuracy of data and supply senior management with accurate and up to date reports. It's crucial for the success of the entire enterprise to correctly report and keep the record of all the expenses.

Expense management in the big company is radically different from the personal budget. It has to be a transparent, comprehensive software-based business process since even if the little expense slip through, in the long run, it can sink an entire ship. You need to prioritize automation and procedures, manual and sporadic bookkeeping is inappropriate in a big company.  

The most efficient way to ease the burden of monitoring and managing employee expenses is to use customized software for these purposes. This way you can introduce and track the enforcement of policies, get detailed reports, etc. Let’s consider what other technology-based solutions, policies, and procedures you can add to your business.

Measure Performance

Any business executive always has to keep an eye on the key indicators of the company performance. In the other worlds, you need to keep tabs on the transfer of your money, especially when large sums are involved.

 Keep studying your company’s financial performance in relation to the past financial reports to predict your future revenue, expenses and cash flow.

Being informed of these aspects will assist you in making an informed business decision.

Automate the Bookkeeping

This is the first thing you need to do. Employees should utilize the software to enter expenses and corresponding receipts whenever it's convenient, while the report automatically go through an evaluation process tailored to your business. Managers and finance departments can analyze reports created from that data.

Enforce Data Entry

The good idea is to mandate the data-entry into the system after each purchase; this way the purchases and expenses won’t get lost. The expense keeping software can flag and deny entries that are not legitimate business expenses. Additionally, you should set limits for expenses such as lunches, accommodation.

Manage Information

One of the main challenges of big companies is managing heterogeneous expense information from different projects. Expense management software provides a variety of options for tracking spending these diverse spendings. You can trace how much was spent on a specific vendor or order an expense report for a particular department or individual. In case you don’t have a uniform expense management system, consolidating those records can takes days or even weeks. Automated systems can easily render reports that can point out discrepancies or even potential violations.  

Control Expenses with Policies

Various companies have a special business or department-level guidelines, as well as conditions associated with specific projects or clients. A couple of expense management software enables companies to control spending by introducing automated enforcement of procedures. It entirely eliminates the need for manually comparing expenses and rules. Non-compliant expenses would be instantly flagged as soon as employees submit them, while the expenses that require special attention can be highlighted and automatically escalated for a management review.

Instant Employee Reimbursement

Expense report systems can significantly assist bursar offices in reducing turnaround time by streamlining submission, employee reimbursement cycles and approval of expenses. Information sharing is simultaneous, therefore employees can start the process by submitting a report even if there are still on the road. In the same time, managers and accountants can immediately review and flag expenses or send them back for the resubmission.

Currency conversion

If your company operates internationally, careless currency conversion can break a bank. A business trip abroad l and the corresponding currency conversions can entangle even the most skilled accountants. Cloud-based expense software can easily solve this issue for you and easily converts and calculates exchange rates for accurate reports.

Hire Professional Help

Obviously, it is better when you can manage all you finance with your own team. Nevertheless, for a complicated audit, expense growth hacking or any other sophisticated financial matter you need to consult with the experts, and sometimes even hire outside help. Sometimes, it pays off to recruit the services of an outside financial expert, even if it is on a part-time basis. It is always good to have another outside opinion. An external accountant can help you to analyze your financial standing,  prospects, bottlenecks by using your data. Especially, I would recommend bringing an outside expert in all the matter concerning taxes. Whether you are planning for the tax year and investigate what kind of write-offs you are eligible for, or fighting for the last year tax returns it is always better to hire a contractor. Tax matters require a specific type of expertise. Nevertheless, you should make sure that you hire someone you trust.

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