If you run a business, you’ll understand the importance of delegating. You can’t oversee everything yourself, it’s too time consuming and it undermines the self esteem of your team. One of the areas you where you will need to delegate responsibility is the spending of company money: your employees will need to spend money in the course of carrying out company business and you need a system to ensure that these expenses are legitimate and that they are recorded. This can be problematic, the word ‘expenses’ has, in the past, too often been equated with ‘perk of the job’, a source of ‘free money’ to be exploited to the full. Usually it is not that employees are intentionally fraudulent, it is simply a failure, on their part, to understand what constitutes a legitimate, expenses claim.
Employees need to understand that the government does not pay employee expenses, it allows certain expenses to be claimed as tax deductible by the company. Employees need clear, detailed guidance on what constitutes legitimate expenses. If they are travelling, engaged on company business, should they travel business class or economy? Can they use taxis? How should they book hotels? Is laundry or loss of property a legitimate business expense? Your employees need a comprehensive understanding of allowable expenses and allowable levels of expense.
Going paperless saves time and money, no more paper, toner or printer maintenance. By switching to automated expense software, you can do away with scrappy little receipts paperclipped to printouts.
Keep evidence of expenditure
Going paperless does not mean that you can dispense with evidence of expenditure. Keep a photographic record of receipts and invoices and proof of expenditure, such as bank statements and credit card statements.
Use prepaid company cards
Prepaid company cards are a fintech solution which enables your employees to spend money on behalf of the company as they need to, but without any of the security risks associated with a conventional credit card. Prepaid cards operate like a conventional credit card, but they are self- contained, and loaded with a specific sum of money which cannot be traced back to your company bank account. Employees photograph expense documentation and upload it via the app and you can track what is being spent as it happens. You can also cap spending on categories, top up budgets, or cancel cards via an app or software. Be sure to choose a prepaid card which will be PSD2 compliant, considering the looming deadline.
Have regular meetings to discuss expenditure
Listening to what your employees say about how your expenses system operates is the best way to fine tune the system to everyone’s benefit. Your employees have a right to carry out their work without unwieldy expenses requirements and you have a right to know that company money is being spent appropriately.
Build a realistic employee expenses budget
Predicting precisely what employee expenses will be is never possible, because of the variables involved, but using previous business trips as a model should allow you to reach a realistic approximate figure. Knowing the number of trips likely to be required in the next six months and their approximate cost should give you a good basis for a realistic expenses budget.