There has been plenty of innovation recently that has helped to both improve the user experience and reduce the hassle of expense management. A smooth expense management policy can make a huge difference to the financial wellbeing of both employers and employees. The overarching priority is to remain user-centric, by making expense management simpler, companies will find it easier to ensure compliance, operational efficiency and maximum revenue potential.
To explore some of these opportunities, we have put together ten tips that every business should take into account when considering implementing expense management programmes.
- Don’t be afraid to go against the grain
It’s important to remember that there isn’t a single fit-all approach when it comes to expense management. Sometimes, small and medium-sized enterprises (SMEs) don’t have a large enough workforce, sufficient capital, or simply the right culture, to justify a full corporate card programme. In contrast, large businesses may require an additional solution to complement physical corporate cards. The important thing is to focus on key business objectives, and develop a bespoke strategy accordingly.
- Not everyone needs a physical corporate card
Although it is important for businesses to look for a tailored solution that addresses the key priorities of their business, this doesn’t mean that they can’t enjoy the benefits of a centralised approach.
For example, American Express offers the Business Travel Account (BTA), a centralised billing payment solution that provides a single view of all of a company’s travel related charges without requiring a physical card. This streamlined process not only gives companies greater visibility and control over expenses, but also helps to save valuable time and financial resources.
- Embrace new technology
New technological solutions such as the automation of expense systems have been helping companies drive cost savings and increase operational efficiency for many years. In particular, virtual cards have been growing in popularity and they bring a range of benefits to both travellers and travel bookers alike: they reduce time and paperwork spent on expense claims, offer easy reconciliation without employees needing to use personal or company cards, and increase compliance with company travel policy. What’s more, virtual cards can enhance security and minimise fraud risk.
- Use data to your advantage
As travel bookers adopt new technology, they will benefit from a much more consolidated view of spending, but also will have large amounts of data at their disposal.
By automating and streamlining expense management processes, business can enjoy greater visibility on upcoming expenses and therefore plan more effectively, track trends, and spot any areas of over-expenditure or excessive costs. Companies can then use this data to obtain better deals with suppliers going forward, or negotiate value added or all inclusive deals with preferred suppliers in exchange for company loyalty.
- Develop KPIs
In order to test the effectiveness of their expense management systems, and avoid wasting time and money, it is crucial that businesses develop meaningful key performance indicators. Data should be continuously monitored in order to identify where companies can make improvements based on their strategic priorities.
- Work with other areas of the business
Expense management doesn’t necessarily have one owner – it can come under HR, finance, or procurement – so businesses need to make sure all areas have a say and benefit from the processes. Automated expense reporting can easily allocate travel and non-travel related expenses to multiple departments and cost centres, leaving no one out of the process.
- Don’t be scared to implement a policy
Expense management is important for businesses of any size, and helping employees understand the expense process and company guidelines is crucial when companies are looking to grow. Whereas some companies – particularly young or smaller companies – are hesitant to implement a travel and expense policy, in fact an official policy will help employees make claims more easily and eliminate confusion.
- If you have a policy in place, don’t forget about the end user
Whilst ensuring policy compliance and efficiency is essential to a successful expense management solution, so is supporting the end user. Mobile technology and consumer-like apps such as Vicinity, which identifies hotels and restaurants where American Express holders can use their corporate card nearby, provide multiple ways to support employees on the move and create a more productive business travel experience.
However, technology can be used to support employees on the ground as well as those on the road: the capture of miscellaneous travel and business receipts is still a significant burden for employees. Apps such as Concur’s ExpenseIT can be used to encourage card holders to photograph their receipt at the time of purchase, vastly simplifying reconciliation on returning to the office.
- Expense management isn’t just about travel
Whilst companies have traditionally used corporate cards for T&E purposes, more and more businesses are now using corporate cards as an additional source of short-term credit to increase working capital and extend cash flow. For example, American Express’ online Buyer Initiated Payment system allows small and medium-sized businesses to pay suppliers and benefit from 55-days credit, allowing greater cash-flow controls and helping to strengthen company-supplier relationships by paying suppliers quickly.
- It isn’t just about you
In addition to using corporate cards to increase company liquidity or support business travellers, companies can gain added value from expense management systems by adding corporate card systems for clients, or providing consumer cards to employees in addition to corporate ones.
By Alan Gillies, Vice President and Head of UK Sales, American Express Global Corporate Payments