The 10 golden rules of expense reports
Managing expense reports is a major issue for all companies. But how do you put a structured management process in place? What measures allow you to efficiently handle and simplify your expense reports? We have compiled a list of 10 rules for you to follow!
1. Set a transparent spending policy
This is arguably one of the most important rules. It is essential to set a clear and transparent professional expenditure policy that is known by everyone. In fact, this not only makes it possible to control, but also to streamline the various stages of expense report management.
Where to start? We’ll give you some examples of the elements to define:
- The different types of expenses that are reimbursed by the company;
- The limits for each type of expenditure;
- The approval process;
- The method for managing expense reports (manual, automated, etc.) ;
- The repayment period;
- Possible sanctions in the event of fraud.
A good business expense management policy should be both simple and detailed. The aim? To avoid any errors and anomalies that, however small, could impact the entire expense report management process.
2. Anticipate costs
As a business, you need to take care to anticipate costs. This is particularly true when your employees incur significant expenses due to the nature of their assignments. It then becomes essential to forecast the costs to be incurred for each type of expenditure and to establish an appropriate management strategy for each of them.
Note: when the costs incurred are greater than expected, employees can ask their employer for an advance on professional costs that will allow them to cover their expenses. This can be one-off or permanent (i.e. included in the employment contract).
3. Set a limit for each type of expense
To manage expense reports properly, companies have to set a limit for each type of expense incurred: transport, meal expenses, accommodation, etc. This rule promotes better monitoring and greater control of the expenses incurred by employees.
4. Reclaim VAT on expense reports
VAT is rarely reclaimed for expense reports as the process is complex, time-consuming and frightens most companies. However, all the expense reports put together represent a total amount of recoverable VAT that should not be overlooked. As a reminder, VAT can be reclaimed on meal expenses (including business meals), corporate gifts and certain travel expenses (rental and maintenance of commercial vehicles in particular). To save money, the company can acquire an automated solution that will allow it to reclaim VAT on expense reports effortlessly. It’s simple and practical.
5. Digitise your receipts and invoices
Did you know? As of 2017, digital supporting documents now have the same probative value as paper supporting documents in the eyes of the administration. However, certain conditions must be respected, in particular secure archiving for 6 years and a guarantee of the document’s authenticity (electronic signature, stamp, etc.).
Digitising expense reports has many advantages: it saves time and is more convenient, it reduces fraud and errors and allows remote accessibility, etc. There are so many reasons to say goodbye to manual expense report processing.
6. Simplify the approval process
There is no need to create countless levels of expense report approvals. Of course, it is reassuring for employers, but this kind of strategy wastes a lot of time. To streamline expense report management, it is therefore recommended to limit yourself to a maximum of two approvals levels, for example, with the line manager and the accountant. To avoid any risk of error or fraud, you can also use an automated solution!
7. Curb expense report fraud
Expense report fraud represents 15% of business expenses for companies. It also exposes them to the risk of tax adjustment. These are the reasons why it is important to set up an expense report control system. Automated solutions make it possible to block the majority of frauds. They represent an effective means of detecting anomalies and reducing the risk of cheating.
8. Process expense reports as they arise
“On-the-fly” processing is a particularly effective technique for managing expense reports. By taking charge of expense reports as they arise, businesses avoid ending up with piles of charges that accumulate and cause delays in repayments. As for employees, they save time and are quickly reimbursed for the expenses they have incurred. Again, an automated solution is ideal here. We will give you more details in the last point.
9. Provide a suitable means of payment
Can you simplify the entire expense report management process further? It’s possible! To do this, employers can provide employees with a means of payment that is well suited to their expenses (for example: a virtual payment card), which is directly linked to the company’s account and with a limit not to be exceeded. The advantages: the employee does not need to pay for the costs in advance, and the company has no reimbursement to make afterwards.
10. Automate all your expense reports with a dedicated tool
Implementing an automated solution is essential for centralising, managing and simplifying expense report processing. This means no more endless validation processes, less risk of fraud and the end of poor visibility for business expenses. Tools like Jenji are here to help you. Thanks to artificial intelligence, we audit, analyse and optimise all of your spending data. The results? It saves time and money while increasing convenience. If you want to put these 10 golden rules into practice, don’t hesitate to contact us for a personalised demo.
Have any questions? All the answers can be found in our Guide to Expense Reports!