To run a business smoothly, you need to keep track of your finances, which also includes employees’ expense management. So, what is expense tracking and how can this prove beneficial for your business? Tracking employee expenses is the best practice for smooth budgeting and reimbursements. This is done using expense management software, simplifying the process. It weeds out the unnecessary spendings from the essential business expenditures. It produces efficiency in compensating employees, which leads to a fair system and a happier team.
Such tracking systems are now automated and easily managed through apps, which brings in the element of efficiency and improved financial management.
To better understand how such employee expense trackers and how they can benefit businesses, let’s see what the experts in the business world have to say;
Ensures Trust
“An expense tracker not only helps ensure that your employees are spending company funds on approved purchases, but it also streamlines the reimbursement process for workers, making sure that they are not left waiting to be repaid for legitimate business expenses. The bottom line is that it helps build trust. By using an expense tracker, full-time employees are confident that they can make expenditures that will be immediately recorded by the business and for which they will be compensated expeditiously.”
Markus Albert, Managing Director, EatFirst
It Assists You In Sticking To Your Budget
“After you’ve created a budget, which is a monthly spending plan that takes into account your income and expenditures, keeping track of your expenses on a regular basis is critical to staying on track. You won’t know when to stop spending in a certain category if you don’t track your money. Check your spending at the end of each month and equate what you spent to what you wanted to spend according to your schedule. Look for ways to minimize expenses in a certain category if you overspent. If you’ve been spending too little, you might want to increase your savings and debt reduction. In any case, you’ll want to use what you’ve learned from monitoring expenses, as well as any life changes (marriage or a new child, for example), to make changes to your budget for the next month that will help you get back on track financially. Tracking your expenditures, for example, could show that you budgeted too little for food or failed to budget for one-time expenses like holiday presents, in which case you may include these infrequent expenses and create a more practical, detailed budget for the following month.”
Chana Charach, CFO at Income.ca
You Gain Financial Knowledge And Develop Your Money Management Skills
“One of the most common causes for business failure is a lack of cash. If cash flow is so important, don’t you think you should do whatever you can to properly control it so you don’t end up with too little? One way to do this is to keep track of your spending on a regular basis so that you don’t get to the end of the month and discover that your expenses have outstripped your revenue. You can monitor expenditures, see what you’re spending your money on, and how much you’re spending by monitoring business expenses on a regular basis. These regular figures serve as a gauge for whether you’re above or under budget for the month. The whole procedure aids in your financial knowledge.”
Dusan Stanar, Founder & CEO of VSS Monitoring
Keeping Track Of Your Expenses Will Reveal Hidden Spending Problems
“The most significant reason for tracking your monthly expenses is to become more aware of your spending habits. You won’t be able to identify poor spending habits that you can quickly alter to make your money work for you if you don’t know where your money is going. Tracking your expenses will also assist you in identifying significant issues in your money management. For example, when you track your expenditures over months or even years, you can notice that your monthly rent is now accounting for a disproportionately large portion of your monthly income, or that you aren’t earning enough to live the lifestyle you want. To address issues like these, you may need to make more dramatic life changes, such as relocating to a more affordable location or taking on a second job to supplement your income. It won’t be easy, but if it gets you back on track financially, it will be worth it.”
Dr. Pooneh Ramezani, CEO, Co-Founder Dr. Brite
Cost Effective
“Managing expense reports by hand is both costly and time-consuming. It is estimated that it takes on average: – One expense estimate takes 20 minutes to complete. – A cost estimate takes 18 minutes to correct. – One expense study costs $58 to process. – It costs $52 to fix one expense report. Companies that simplify the expense management process will significantly reduce the time and resources expended on this critical mission. Around the same time, they develop a greater understanding of particular employees’ spending patterns, making it possible to identify excessively large costs and fix them.”
Bram Jansen, Chief Editor of vpnAlert
Accuracy
“Accurate bookkeeping is incredibly important for small businesses. Even if your expense account isn’t large, you still need to track expenses for every full-time employee. Travel expenses, meal compensation, work supplies–all of it needs to be tracked, ideally on the day of the expense. You can use any accounting software for this, but Quickbooks is one of the easiest. Have a system in place with your employees providing you with their receipts and someone on your team (with accounting experience, ideally the same person handling payroll) inputting them as soon as possible.”
Rex Freiberger, CEO, Gadget Review
Expense Tracker Do Justice with Your Employees & Business
“Having an expense tracker is the proper way of reimbursing your full-time employees, for all the expenses incurred in the line of business. By using an expense tracker, you can be able to properly reimburse them for business-associated expenses such as: Meals, Traveling, External business meetups/events, Other business operations. These rightfully legitimate expenses, when reimbursed properly, will motivate, encourage, and make enable your full-time employees to do their best for business. Additionally, expense tracking is also fruitful when it comes to tracking down those employees who are incurring financial benefits unethically. In both ways, this is beneficial for the business in the end.”
Will Cannon, CEO of Uplead
Efficiency
“Expense trackers take the labor out of organizing employee expenses and reimbursements. By leveraging automation, you can generate accurate reports without ever having to sit down and crunch numbers. Expense trackers are an efficient way to reduce organizational waste and ensure that you’re staying on top of your finances.” says Nishank Khanna, Chief Financial Officer Clarify Capital. Expense tracking is no longer a tedious process, with software tracking systems also reducing the chances of mistakes;
“Fewer errors: Not only does expense tracking save you time and work, but it also reduces the likelihood of errors. Using software might give you peace of mind because you know that your expense report will consistently generate an accurate output. If you plan to use your expense report to help you with accounting and taxes, you benefit from the traceability of transactions and the precision of financial calculations.”
