Keeping a careful eye on the company’s balance sheet is a fundamental part of managing and growing a small business. Having visibility of incoming and outgoing expenses and payments is an important aspect of this, as it equips companies with the insight they need to make fast, well-informed decisions when developing their business strategy.
However, all too often the nature of the expense management process means achieving visibility can be a challenge. The necessary information might be held by different people, or across multiple systems, or employees might be using personal credit cards for expenses, and filing their expenses claims late.
The good news is that there are a few simple steps that small companies can take to improve how they manage expenses and payments and set them in good stead to unlock resultant business benefits.
- Try an End-to-end expense management system and embrace automation
One increasingly popular approach is to use an end-to-end expense system that automates the processing, allocation and payment of expenses. Such systems have seen technological advancements in recent years, with cloud-based solutions now available that are affordable for small companies.
An end-to-end expense management system not only allows companies to gain a greater understanding of their financial position at-a-glance but can also help identify areas of over-expenditure or excessive costs. Companies are then well equipped to make decisions that will create efficiencies and drive cost-effective purchasing decisions.
- Implement a company policy
Another important element to consider is communication. An official and robust T&E policy will eliminate any confusion amongst employees and provide better control over spending. By outlining preferred suppliers for employees to use, ensures that similar levels of travel arrangements are being accessed by all employees. With this level of visibility on spend, companies will have greater negotiating power when it comes to contract renewal.
From an internal perspective, regular updates to ensure employees understand the policy and expense management process will help businesses avoid financial headaches.
When creating an expense policy, it’s important to think about the end user: do employees have a corporate card, or a mobile solution to help them capture business receipts? Having such facilities in place will help boost compliance and streamline the expense management process.
- Use a corporate card as a facilitator
A corporate card programme can be a useful facilitator for expense management, giving companies greater control, oversight and data. At the same time, corporate cards simplify the process for employees’ T&E expenses and can even provide cash flow benefits when it comes to business expenses.
Taking note of employees’ preferences is also important. Many now expect to be able to use the same technologies for business as in their personal lives, and providing these technologies can help encourage employees to follow company policies and processes. For example, American Express introduced Apple Pay for corporations earlier this year, enabling employees to integrate their corporate cards with their personal devices for greater convenience.
These three examples outline the steps that companies can take to enhance their expense management. Although there is no one-size-fits-all approach, by keeping business objectives in mind and exploring new technologies, principles and tools, companies can not only gain greater visibility of their financial position – they can take control of their expenditure. Doing so is a key building block on the road to increased growth and profitability.
Alan Gillies is the Vice President, UK Sales, Commercial Payments UK, American Express Global Corporate Payments,