Expense Management – 1015 min read

Expense Management – 1015 min read

Expense management is generally perceived as a time–consuming, relatively hard, and detailed process that is prone to making mistakes.

But in fact, it is a crucial element to the healthy monitorization of your company or enterprise, which leads to a smooth growth and accountability mechanism.

What is Expense Management?

It is appropriate to say that expense management is a multi-step process. In this process, you need to work with expense reports, expense approval, and employee reimbursements in order to manage expenses transparently and sustainably.

Generally speaking, there are two traditional ways of reporting expenses. You can either do it manually by using paperwork and spreadsheets, or you can use expense management software in order to do so.

Expense Management Types

Let’s take a close look at the types of expense management that we mentioned above:

Paper Forms

We should accept that keeping and reporting expenses through paper forms is a relatively old-fashioned and traditional way of doing so. Yet that doesn’t mean that it doesn’t have an upside. This is also the cheapest method of expense management.

You can simply have an employee keeping reports manually for the firm. However, there is also a downside; it is inefficient and generally negatively affects the motivational atmosphere.

Spreadsheets 

This method also needed manual work like paper forms. The difference is that in this method, you can submit forms on a computer, and they will add up in the end.

It is not wrong to say that spreadsheets are a relatively better and more convenient way to achieve expense management since it is still inexpensive but more simple than keeping paper receipts.

Expense Management Software

As you may also know, to have software for expense management, you need to purchase the program and make it accessible for the users. But it will be worth this little burden thinking of the many advantages compared with the traditional methods.

It is far more efficient and convenient than the other types of expense management options. In addition to all the above.

Having software for expense management is faster and more effective, which helps your company to avoid a time-consuming and full of mistakes full process.

Why is expense management important?

Having strong expense management is important for all the stakeholders of the company. It ensures effectiveness and convenience, which helps the atmosphere of the working environment.

In addition, it offers credibility and accuracy. Moreover, a well-defined expense management policy will surely improve your company’s professional image.

Steps of Expense Management Types

Manual Methods

1. 1. 1. The employee makes an expense
      2. Collets bills and reports
      3. Submits for approval
      4. Get approved or rejected
      5. Get reimbursement on approval
      6. Sent back on rejection

Software Method

1. 1. 1. Employee logs an expense
      2. Submit detail for approval
      3. Get approved or rejected
      4. Reimbursed on approval
      5. If rejected after the audit, justify the policy violation

No matter what, you need to choose one of the methods of expense management. You can go through the options and decide which one is the perfect fit for your company. You can check the UK goverment website for different details on the subject.