Expense management automation

Your guide to 2020 IRS mileage rate

January 7, 2020
|
6
Min Read

Does your business reimburse employees for mileage? If so, did you know the IRS revises the standard mileage rate each year? 

After a significant increase in the mileage rate for the use of a personal vehicle for business purposes in 2019, this year the rate has slightly decreased. 

Below, we have compiled the latest information on the mileage rate published by the IRS (Internal Revenue Service). Let’s dive in!

The new standard mileage rate for 2020

There have been some significant changes in the mileage rate this year. These changes will be applicable, starting from January 1st, 2020. The new IRS standard mileage rate can be used by taxpayers to calculate the deductible costs for operating a vehicle for business, medical, and charitable purposes.

Some points to be noted are:

  • For the business use of a car, the rate has dropped down to 57.5 cents per mile. (0.5 cents lesser than 2019.)
  • For medical or moving purposes, the rate has changed to 17 cents per mile. (3 cents lower than last year.)
  • For charitable purposes, there has been no change and will remain 14 cents per mile driven.

The standard mileage rate is set based on the annual data compiled for the fixed and variable costs. This includes repairs, maintenance, depreciation, insurance, tires, gas, and oil. For the mileage rate of medical and moving purposes, it is calculated based on just the variable costs.

SUGGESTED READS:

Policy considerations for mileage reimbursement

Non-profit expense reimbursement guidelines and best practices

Volunteer mileage rates and IRS reimbursement guidelines

2020 standard mileage rate under Tax Cuts and Jobs Act

The current law, Tax Cuts and Jobs Act states the following:

  • The miscellaneous itemized deduction for unreimbursed employee business expenses is suspended from 2018 to 2025. 
  • Employees cannot use the standard mileage rate to claim expenses during the period mentioned above. 
  • Taxpayers cannot claim expenses for moving purposes as well. But an exception applies to members of Armed Forces moving to a permanent change of station under military order.

Note:

1. The depreciation portion of the standard mileage rate will be 27 cents per mile. (1 cent more than in 2019.)

2. Under the fix-and-variable-rate (FAVR) plan, the maximum standard automobile cost is $50,400 (the same as 2019) for all automobiles.

SUGGESTED READS:
Your comprehensive guide to IRS mileage reimbursement

Fyle helps you in using Google Maps to track mileage

How to log mileage in under a minute with Fyle?

2020 mileage rate for your personal vehicles

Employees may usually use their vehicles to run office errands. In such cases, the IRS mileage rate is a useful benchmark for calculating mileage expenses to be reimbursed to employees. It also plays a vital role in ensuring policy compliance. 

Maintaining a mileage record can help your team calculate, analyze, and monitor every cent spent on the business. Additionally, employee handbooks and mileage log records can be used as reference points by your finance teams to make well-informed business decisions. It also helps detect and curb any expense fraud.

Are you interested in getting an accurate and reliable mileage calculation for your employee mileage reimbursements? Schedule a demo with Fyle to learn how you can incorporate the latest IRS mileage rate into your policy!

 IRS-mileage-rate-2020
Product update

2019 so far at Fyle - more than 10 new features and other amazing updates! 🚀

June 20, 2019
|
5
Min Read

2019 has been quite a ride at Fyle. We’ve taken huge risks, and they’ve given us great results. Our product has consistently seen fresh updates, ensuring our customers get the best out of Fyle.

Every release in 2019, thus far, have been active steps towards holistically improving expense management. Without further ado, let’s dive in.

Better expense reporting and receipt management 📃


Bulkfyle

With Bulkfyle, users instantly upload multiple receipts, from their computer, Dropbox, or Instafyle (Fyle’s mobile app.)


Differential mileage rates

Admins configure differential rates that automatically change the applicable rate based on the distance logged.


Gmail add-on

Employees directly report expenses from their Chrome browser or Gmail mobile app. Additionally, they also match expenses to corporate cards, add them to existing Projects, and more.


Draft Reports

Employees add expenses on-the-go using the web or mobile app to report expenses without submitting it for approval.

Simpler cash advance management 💵


Advance request policies

Employers control the spending actions of specific employee groups by limiting the number of requests raised, the capping amount, skipping system approvers, and more.


Cross org approvals

Approvers approve advance requests from any of their entities/organizations within Fyle, without any hassle.


Advance request approvals on mobile

We’ve worked hard to reduce the need for accessing Fyle through the web. Now, approvers approve all advance requests from their mobile app, at their convenience, with a single click.

Easier corporate credit card management 💳


Reconciliation from everywhere

Employees reconcile transactions to expenses directly from the mobile app, the Gmail add-on, or the Chrome extension.


Automatic reminders

Finance teams set up automated reminders for employees to match card transactions to reported expenses.

Stronger policy enforcement engine 🚨


An upgraded policy creation module

Employers easily implement complex policies within Fyle. These are for specific employee groups, levels, departments, against expense categories, and more.


Holiday list

Employers configure company holidays and raise flags for expenses created on holidays.


Expense receipts

Finance teams ensure compliance by making receipts mandatory for company-wide expenses, with just a single click.

Advanced travel expense management ✈️


Revamped trip requests

Employees don’t just raise a pre-trip authorization but also transport and stay booking via the web or mobile app.


Trip request policies

Finance teams now control actions of specific employee groups by limiting the number of trip requests raised, capping transport/stay bookings, skipping system approvers, and more.


Personalized trip requests

Finance folks now enable trips for specific employee groups. They also include custom fields in the trip request forms.


Cross org approvals

Approvers approve trip requests along with transport/stay bookings from any of their entities/organizations within Fyle, without any hassle.

Fresh, upgraded Analytics 📊


Analytics

With Fyle, employers now rationalize current spends, forecast high-risk factors, optimize processes, enhance their team’s productivity and more!


Enhanced performance and experience 🙌


Hourly refresh

We’ve reduced the time to acquire actionable data in Analytics from 24 hours to 1 hour!


Access delegation

Admins now directly delegate access to their account using the mobile app.


Dynamic forms

Employers control the display of expense categories based on Project selected.

It’s a wrap! 🎬


If 2019 wasn’t already loaded with enough new features, we’ve added one more this month to ensure a breezy review of your expenses.

Now, all expenses that have incomplete information and need review will appear in a new ‘Draft Expenses’ tab, instead of our otherwise ‘Needs Review’ tab.

You can click on ‘Start review’ to swiftly solve them all, one expense at a time.


If you like what you see, be rest assured we have more!


Travel Expense Management

Travel expense management

Best Practices to Effectively Manage a Travel Expense Audit

April 1, 2020
|
4
Min Read

The average business trip costs over $1,293, and that cost is expected to increase. Plus, travel is one of the hardest expense categories for business owners and managers to control.

To add to the problems, some people call travel expense report fraud the "gateway" to even bigger things. Employees who migrate to more significant scams typically begin by dabbling in travel expense report fraud. 

When was the last time a travel expense audit was conducted to check for things like expense report fraud?

Interested to learn more about travel expense audits and some of the best practices for mitigating fraud? Here's a guide that breaks it down for you.

What is a travel expense audit?

When employees travel, they spend money on things like hotels, airfare, meals, coffee, and other travel-related needs. They save their receipts and either input them into a shared virtual space or save them to submit when they return from traveling.

A travel expense audit focuses on the approval of those reimbursement items. It also analyzes the adequacy of supporting documentation provided by the employees.

Sometimes a company realizes they're losing too much in petty cash. Often, there are too many discrepancies in the reported expense numbers. It could be due to a misunderstanding of the company's travel and expense policies, or it could be as a result of reimbursement fraud.

A travel expense audit helps you find out what’s hurting your bottomline. A to-do checklist can help you make sure all the right steps are being followed.

Travel expense audit to-dos

  • Evaluate your overall internal control environment

Take a look at the way expenses your organization handles business expenses. This includes pre-authorizations, approvals, and the final review. Also, ensure different employees perform different tasks. For instance, travelers should never be permitted to approve their own business expense claims.

  • Assess the effectiveness of your current processes

Ensure you tailor your operations to fit your organization and its needs. For example, if travelers get to approve their own expenses, it's a red flag for ineffectiveness. Your current process should be prepared to tackle both present and future scenarios.

  • Test selected reports in detail

Going through all the reports may be time consuming and laborious. You can select reports and go through them thoroughly. This might be an excellent exercise to pinpoint the most compelling parts of your processes. Detailed testing can also help you identify if travel expenses made by employees always serve business purposes.

  • Analyze your travel and expense (T&E) policies

Your travel and expense policies must be concise with a clear set of guidelines. This ensures those involved in the expense reporting process have clearly defined roles with no crossover. A comprehensive T&E policy can help avoid reimbursements of fraudulent expenses or misrepresented expenses.

SUGGESTED READ:

What is Travel and Expense Policy?

Why are travel expense audits important?

Too many businesses avoid travel expense audits because they're time-consuming and extensive. However, by using better tools, you can make the process easier and more efficient. 

Travel expense audits are vital for cutting costs. They also ensure that all employees are compliant with travel and expense policies.

More importantly, internal audits serve as the primary way to recognize and prevent fraud. A rigorous system for operations and internal controls can help detect fraud and accounting irregularities.

What are travel expense audit procedures?

Audit procedures are the methods (or steps) performed by auditors to get all the information they need. They then use this information to form a report. The report reveals whether or not it represents a clear and fair view of the financial position of the company or sector in question.

  • Procedures are always outlined during an audit's planning stage. First, the audit's objective gets declared, followed by the approach, scope, and any potential risks.
  • Audit procedures must be sound to identify and prevent future fraud. They must also include a plan to detect any fraud in the future.

A travel expense tracker, for example, is an excellent way to combat multiple reimbursements.

What do audit procedures entail?

It is essential to follow a set procedure for a travel expense audit. Having a well-defined and well-communicated procedure helps prevent confusion and chaos within teams or processes. It also supports all stakeholders to understand their role in the process. This helps everyone stay informed and proactive. 

Audit procedures include:

  • Analytical review of expense reports

In an analytical review, an auditor analyzes whether or not financial information is materially sound. They'll do so by matching up records with receipts. This is where having well-documented receipts and expense reports come into play. 

  • Inquiry into suspicious expense claims

Here an auditor can interview employees if they find anything fishy. For example, if an employee always eats at the same restaurant, or entertains the same "clients." The auditor in this case  can ask how all of those meals are business-related.

  • Inspection of company travel policies

Here, the auditor can inspect and analyze the company policies. Using these findings, they can determine how strict supervisors are in making sure travelers follow them. This is where most businesses end up running into trouble with the IRS. 

  • Recalculation and verification of financial records 

This is where the auditors will recalculate and inquire until all financial irregularities are accounted for. Remember, as processes become more refined and stable, audits can occur less frequently too. 

Best practices to mitigate business expense fraud

A recent study suggests,  nearly 1 in 5 occupational fraud involves expense reimbursement. What’s saddening is these whopping numbers show up despite over 80% of companies stating audits are necessary. Don't play around with your business' money. 

No matter how much you trust your employees, there could still be glitches or dishonesty that's costing you. Some ways in which individuals exhibit fraudulence are:

  • Overstating expenses
  • Submitting fictitious costs
  • Reimbursing multiple times
  • Mischaracterizing expenses

In addition to performing regular audits, here are some hacks to avoid expense fraud:

  • Create and enforce a well-defined travel expense policy that’s easy to read and digest
  • Monitor all expense reports and regularly check for duplication and errors
  • Manage receipts using an expense management software for more consistent entries
  • Make sure there are clear, enforced approval policies for both before and after submitting an expense

Another helpful tip is to use an expense management software that captures all employee spending using mobile-based receipt data extraction. These advanced apps use technology like OCR (Optical Character rRecognition), that help eliminate the task of manual data entry. As a result, there will be fewer human-prone errors too. 

SUGGESTED READ:

How to detect and prevent expense report fraud

A travel expense management software will save you time and money

Your business can mitigate fraud and ensure compliance by performing regular audits and following the best practices of the industry. But if done manually, this process could cost you time, money, and effort. A more effective and easier way to ensure your bottom line is covered with minimal manual intervention is by using an expense management software. 

When you incorporate an expense management software, all stakeholders stand to benefit. 

  • Your finance teams would no longer need to hound employees for expense submissions. They would also not be under heaps of receipts pending on verification and approval. 
  • Your employees would no longer have to fill in lengthy, tedious forms for reimbursements. They would also not have to lose out on their money for business-related expenses. 

Happy employees at the workplace mean an increase in employee productivity and morale. This has  proven to be a winning formula for any business aiming to scale. 

Are you curious to know how we can help increase employee productivity while also streamlining your expense management? Get in touch with us today by scheduling a demo!

Travel expense management

Best Practices to Effectively Manage a Travel Expense Audit

April 1, 2020
|
4
Min Read

The average business trip costs over $1,293, and that cost is expected to increase. Plus, travel is one of the hardest expense categories for business owners and managers to control.

To add to the problems, some people call travel expense report fraud the "gateway" to even bigger things. Employees who migrate to more significant scams typically begin by dabbling in travel expense report fraud. 

When was the last time a travel expense audit was conducted to check for things like expense report fraud?

Interested to learn more about travel expense audits and some of the best practices for mitigating fraud? Here's a guide that breaks it down for you.

What is a travel expense audit?

When employees travel, they spend money on things like hotels, airfare, meals, coffee, and other travel-related needs. They save their receipts and either input them into a shared virtual space or save them to submit when they return from traveling.

A travel expense audit focuses on the approval of those reimbursement items. It also analyzes the adequacy of supporting documentation provided by the employees.

Sometimes a company realizes they're losing too much in petty cash. Often, there are too many discrepancies in the reported expense numbers. It could be due to a misunderstanding of the company's travel and expense policies, or it could be as a result of reimbursement fraud.

A travel expense audit helps you find out what’s hurting your bottomline. A to-do checklist can help you make sure all the right steps are being followed.

Travel expense audit to-dos

  • Evaluate your overall internal control environment

Take a look at the way expenses your organization handles business expenses. This includes pre-authorizations, approvals, and the final review. Also, ensure different employees perform different tasks. For instance, travelers should never be permitted to approve their own business expense claims.

  • Assess the effectiveness of your current processes

Ensure you tailor your operations to fit your organization and its needs. For example, if travelers get to approve their own expenses, it's a red flag for ineffectiveness. Your current process should be prepared to tackle both present and future scenarios.

  • Test selected reports in detail

Going through all the reports may be time consuming and laborious. You can select reports and go through them thoroughly. This might be an excellent exercise to pinpoint the most compelling parts of your processes. Detailed testing can also help you identify if travel expenses made by employees always serve business purposes.

  • Analyze your travel and expense (T&E) policies

Your travel and expense policies must be concise with a clear set of guidelines. This ensures those involved in the expense reporting process have clearly defined roles with no crossover. A comprehensive T&E policy can help avoid reimbursements of fraudulent expenses or misrepresented expenses.

SUGGESTED READ:

What is Travel and Expense Policy?

Why are travel expense audits important?

Too many businesses avoid travel expense audits because they're time-consuming and extensive. However, by using better tools, you can make the process easier and more efficient. 

Travel expense audits are vital for cutting costs. They also ensure that all employees are compliant with travel and expense policies.

More importantly, internal audits serve as the primary way to recognize and prevent fraud. A rigorous system for operations and internal controls can help detect fraud and accounting irregularities.

What are travel expense audit procedures?

Audit procedures are the methods (or steps) performed by auditors to get all the information they need. They then use this information to form a report. The report reveals whether or not it represents a clear and fair view of the financial position of the company or sector in question.

  • Procedures are always outlined during an audit's planning stage. First, the audit's objective gets declared, followed by the approach, scope, and any potential risks.
  • Audit procedures must be sound to identify and prevent future fraud. They must also include a plan to detect any fraud in the future.

A travel expense tracker, for example, is an excellent way to combat multiple reimbursements.

What do audit procedures entail?

It is essential to follow a set procedure for a travel expense audit. Having a well-defined and well-communicated procedure helps prevent confusion and chaos within teams or processes. It also supports all stakeholders to understand their role in the process. This helps everyone stay informed and proactive. 

Audit procedures include:

  • Analytical review of expense reports

In an analytical review, an auditor analyzes whether or not financial information is materially sound. They'll do so by matching up records with receipts. This is where having well-documented receipts and expense reports come into play. 

  • Inquiry into suspicious expense claims

Here an auditor can interview employees if they find anything fishy. For example, if an employee always eats at the same restaurant, or entertains the same "clients." The auditor in this case  can ask how all of those meals are business-related.

  • Inspection of company travel policies

Here, the auditor can inspect and analyze the company policies. Using these findings, they can determine how strict supervisors are in making sure travelers follow them. This is where most businesses end up running into trouble with the IRS. 

  • Recalculation and verification of financial records 

This is where the auditors will recalculate and inquire until all financial irregularities are accounted for. Remember, as processes become more refined and stable, audits can occur less frequently too. 

Best practices to mitigate business expense fraud

A recent study suggests,  nearly 1 in 5 occupational fraud involves expense reimbursement. What’s saddening is these whopping numbers show up despite over 80% of companies stating audits are necessary. Don't play around with your business' money. 

No matter how much you trust your employees, there could still be glitches or dishonesty that's costing you. Some ways in which individuals exhibit fraudulence are:

  • Overstating expenses
  • Submitting fictitious costs
  • Reimbursing multiple times
  • Mischaracterizing expenses

In addition to performing regular audits, here are some hacks to avoid expense fraud:

  • Create and enforce a well-defined travel expense policy that’s easy to read and digest
  • Monitor all expense reports and regularly check for duplication and errors
  • Manage receipts using an expense management software for more consistent entries
  • Make sure there are clear, enforced approval policies for both before and after submitting an expense

Another helpful tip is to use an expense management software that captures all employee spending using mobile-based receipt data extraction. These advanced apps use technology like OCR (Optical Character rRecognition), that help eliminate the task of manual data entry. As a result, there will be fewer human-prone errors too. 

SUGGESTED READ:

How to detect and prevent expense report fraud

A travel expense management software will save you time and money

Your business can mitigate fraud and ensure compliance by performing regular audits and following the best practices of the industry. But if done manually, this process could cost you time, money, and effort. A more effective and easier way to ensure your bottom line is covered with minimal manual intervention is by using an expense management software. 

When you incorporate an expense management software, all stakeholders stand to benefit. 

  • Your finance teams would no longer need to hound employees for expense submissions. They would also not be under heaps of receipts pending on verification and approval. 
  • Your employees would no longer have to fill in lengthy, tedious forms for reimbursements. They would also not have to lose out on their money for business-related expenses. 

Happy employees at the workplace mean an increase in employee productivity and morale. This has  proven to be a winning formula for any business aiming to scale. 

Are you curious to know how we can help increase employee productivity while also streamlining your expense management? Get in touch with us today by scheduling a demo!

Travel expense management

How to Create an Expense Report in Under 5 Minutes

March 19, 2020
|
3
Min Read

Dear Small Business Owner,

There are 4 things you need to know about expense reports.

  1. They are important for businesses of all sizes.
  2. They are not just for employee reimbursements.
  3. They contain data that’ll help you cut costs and plan better. 
  4. They help you stay compliant.

Sincerely,
Every finance team ever.

Even a small team incurs business expenses like transportation, meals, travel, and other incidentals essential for business operations. It is vital to record these expenses and have accurate reports of the same. We’ll tell you how to create an expense report in under 5 minutes and ways to make it easier too.

SUGGESTED READ:

What is a T&E report and why is it important?

How to create an Expense Report?

Simple, you can just google it. You’re spoilt for choice when it comes to easily downloadable options. In fact, you can even find expense report templates in Microsoft Excel.
But is a generic template off-the-internet the best choice for your company?

Here’s a list of essentials that your expense report must contain:

  • Name, department, project name and contact information
  • Names/ codes for expense itemization
  • Date when the expense was incurred
  • Purpose of expense
  • Receipt as proof of expense
  • Actual expense amount, i.e., how much the company has to pay.

This checklist can be a start, but you should tailor your expense report to fit your business’s needs. If you don’t, it becomes an unproductive, time-consuming task for all stakeholders involved.

A to-do list for employees:

  • Safekeeping of all receipts related to business expenses.
  • Recording and reporting one receipt at a time through manual data entry.
  • Matching receipts with corresponding spends and projects.
  • Chasing expense report submission deadlines.
  • Chasing the financial team in case of policy violations or delayed reimbursements.

A to-do list for finance teams:

  • Chasing employees to submit expense reports.
  • Manually verifying receipts, both paper and digital.
  • Checking for policy violations and compliance issues.
  • Understanding and reporting spends to business owners and other stakeholders.
  • Facing the wrath of IRS in the event of non-compliance.

That’s a lot of chasing and back and forth for a simple report.

Enter Expense Management Automation. Enter Fyle.

Fyle helps you save your crucial productive hours to tend to other daunting business tasks.

Does your business need expense automation?

In recent years new technology has not only made expense reporting and processing easier for employees, but it has also made it much more efficient and cost-effective for employers. A modern expense management solution is a must for any business that wants to ease the burden of tracking and reporting expenses for employees. Additionally, you need to make sure your business isn’t overpaying for fraudulent or non-compliant expense claims.

SUGGESTED READS:

Benefits of online receipt management over traditional methods

How to achieve faster reimbursements for travel expense reports?

How to manage receipts to ensure your team is always audit-ready?

Here’s how Fyle helps make Expense Reporting easy!

We’ll just let our mission statement do the talking here.

“We’re creating a receipt management and expense reporting suite so good that you never have to think about managing business expenses, ever.”

The numerous ways in which Fyle allows reporting is a small testament to the sincerity of this statement.

Got a paper receipt?

  • Scan it with smart OCR in the Fyle app.
  • Click a picture and send to Fyle directly from your gallery/ WhatsApp.
  • Or, manually upload from your computer, Dropbox or Google Drive.
  • Send your receipt as a text and see it in Fyle as an expense.

Got an e-receipt?

  • Fyle expenses directly from your inbox using our Chrome extension, G-Suite add-on, or Microsoft Outlook add-in.
  • Submit recurring expenses from apps like Uber and Lyft directly using Fylemail.
  • Or, simply click on “Find my receipts” and sit back while Fyle discovers and categorizes receipts from your Gmail.

Got multiple receipts?

  • Upload multiple receipts anywhere, anytime and from a device of your choice using BulkFyle.

Fun Fact: One of our users once fyled 2609 expenses in a single go!

Traditionally, once you have uploaded all your receipts, you would then need to match the expenses to corresponding projects or categories manually. Once this is done, you would have to stitch them together to create and submit an expense report.

But Fyle handles this as well for you. Once you have matched the expenses, you can simply save or submit your expense report for approval.

On creating the expense report, it can be sent to the approver for approval. Fyle also runs real-time policy checks on all submitted expense reports to detect and flag duplicate and fraudulent expense claims. We also flag and notify both the user and the approver in case of a policy violation.

This is how we’ve made a historically time-consuming task, expense reporting, a breeze.

Don’t believe us? Allow us to demonstrate. Schedule a demo now!

how-to-create-an-expense-report


Effortless expense management for all business spends. Earned time, saved costs, improved productivity, happy employees - achieve it all with a single software.

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Corporate Card Reconciliation

Corporate card reconciliation

Does your business face challenges in the Corporate Credit Card Reconciliation Process?

March 3, 2020
|
5
Min Read

If you’re a growing business, the move towards getting a corporate credit card becomes a necessity. This small plastic card gives businesses higher power and convenience in managing business expenses and more. 

While all of this makes the corporate card seem like a boon, it also has a downside to it. If managing business expenses is a challenge for your business, chances are you also face challenges in your corporate credit card reconciliation process. These processes, if not handled efficiently, can cause financial leaks. This can prove detrimental to the health and growth of your business. 

Below, we will discuss:

  • The importance of Corporate Credit Card Reconciliation
  • How to effectively reconcile Corporate Credit Card expenses
  • Reconciliation challenges finance and accounting team face 
  • Efficient  and easy ways to overcome these challenges

SUGGESTED READ:

How to select a Corporate Credit Card program for your business

Why is the Corporate Credit Card Reconciliation Process important?

Making a payment for your credit card statement without a second glance may not be the wisest thing to do. Big financial institutions make mistakes too, and it can end up costing you a lot more than what you should be paying. 

The reconciliation process starts when a business receives charges for their expenses. The expense details are then manually matched to the company’s internal finance record to look for any discrepancies. 

This process ensures:

  • The money leaving the account is equal to the amount spent in one fiscal period
  • No fraudulent activities get by.
  • The company’s records always stay audit-ready.

How to reconcile corporate credit card expenses?

Reconciliation, as we know, involves the process of matching expenses with your internal finance record. But how do you go about the entire process? 

Step 1: Collecting and sorting receipts

Receipts are proof of expenses. It comes in several forms and helps  account for money spent. A purchase made using a credit card comes with an invoice given to the customer at the time of sale. These receipts should be collected from all the cardholders and stored for future reference.

Pro tip:

Paper expense report forms, Excel sheets, and receipt scanners are the different ways that companies use to store the details of their business expenses.

Step 2: Matching expenses to transactions

With the receipts in hand, finance teams can now match credit card statements to reported business expenses.  Businesses can do this with  the help of any preferred system for reconciling. 

Pro tip:

Ensure that other than fees and interest charges, there shouldn't be any other unmarked items in the credit card statement.

Step 3: Notifying your bank in case of error

There are always chances of error, either with or without intention. These errors can be corrected if you notify your bank at the earliest. Ensure timely action by reporting any unauthorized activities or fraudulent behavior.

Some examples of commonly occurring errors with card reconciliations are:

  • Refund for a canceled purchase 
  • Charged for a failed transaction 
  • Bill payment processed twice leading to duplicate charges

SUGGESTED READ:

How to Manage Receipts Effortlessly (For The Modern Employees)

3 challenges finance teams face with the Corporate Credit Card Reconciliation Process

Most companies reconcile credit card expenses with paper-based and spreadsheet-driven methods. This process is not only inefficient but also forces employees to put in long hours of manual labor. This, in the end, only results in more inefficiencies and loopholes in the process. Given below are some challenges that can hinder your finance team’s progress:

  • Ensuring accuracy and efficiency in the entire reconciliation process

For employees, reconciling corporate credit card expenses means entering data without making an error. Even a single missing number or double entry can put the employee's reimbursement on hold. Also, routinely reporting expenses to get back their own money can affect employee happiness.

For finance teams, inaccuracy and inefficiencies in the credit card reconciliation process make the company vulnerable to financial exposure. Also, the traditional methods of reconciliation include a high-involvement of employees but do little to remove human-prone errors. 

In case an employee uses the card for personal expenses, there needs to be a way to flag it accurately. When matching the expenses with the bank statements, the finance team has to identify and address personal expenses. While reconciling, finance teams also have to make sure that there are no errors made by the vendors or credit card issuers. 

  • Curbing an increase in the volume of transactions 

Corporate credit cards have helped revolutionize the speed and efficiency of payments in businesses. But this also implies a high volume of transactions. With the ever-growing number of transactions, the chances of missing human errors, duplicate submissions, and inaccurate information also get higher.

Along with multiple card programs for various employees, departments, and categories, all the data needs to be pulled and managed under one tab. Your accounting team has to sieve through all the transactions and reconcile one-to-one and one-to-many transactions. This can prove to be a costly and cumbersome expense for your company and employees.

  • Recognizing and correcting policy violations

According  to a survey conducted by Ernst & Young

Financial departments spent up to 59% of their resources on managing transaction-intensive processes.  Of this, 95% of the effort goes into transactions that are already matching rather than with entry-related problems.

The traditional approach to credit card reconciliation offers no quick and coherent method to find policy violations. Employees have to painstakingly go through every transaction to make sure expenses are following the company's policies. This further adds to the delay.

Whenever an employee uses the company's credit card for personal expenses or overspends, there is no way of getting notified unless checked manually. Additionally, a loose policy framework coupled with weak enforcement of policies can misinform employees and cause unauthorized purchases. This also increases the chances of fraud and claims to multiple duplicate expenses.

Address your reconciliation challenges 

The manual corporate credit card reconciliation process is time-consuming, costly, and laborious. Additionally, if not done right, it can pose a huge threat to the financial health of your business. The modern approach to ensure a high benchmark of accuracy and efficiency is by implementing an automated expense management software. 

Opting for an automated solution over a manual system can help your business overcome these challenges: 

  • Save time without manually reconciling card spends

Your team (employees and finance teams) end up wasting a lot of time manually inputting, verifying, and approving business expenses. Sadly, irrespective of all the time and effort they put in, duplicate and fraudulent entries still slip by. You can negate this by using a software that eliminates manual data entry and manual data verification.

An Expense Management Software gives the ability to extract transaction details from the receipts virtually. Hence, expenses can be submitted, approved, processed, and reimbursed, all without the need for manually entering details. Therefore, the chances of human error and human bias also drastically reduce.

  • Automatic reconciliation of credit card expenses 

With an expense management software, all receipts and bank statements are automatically matched and reconciled within a few clicks. This saves the accounting team from having to verify and approve large quantities of transactions manually.

Additionally, an expense management software helps:

  1. Store all transaction details under one centralized system.
  2. Record all and any changes in the form of a digital audit trail. 
  3. Enable employers and finance teams to gain a cursory view of all expenses
  4. Identify and rectify any errors before they are processed.
  5. Streamline the entire process and also facilitate faster reimbursements. 
  6. Access information using any device from anywhere and at any time.
  • Increase employee compliance with real-time policy checks

Integration with an automated solution helps ensure that all stakeholders remain compliant at all times. A TEM  software makes sure the expense policies and guidelines set by the company are in alignment with every expense report claim submitted by an employee.

In the case of a policy violation, an automated expense management software will:

  1. Notify all stakeholders of a flagged expense. 
  2. Run automatic policy-checks to reduce the chances of fraudulent activities, duplicate claims, and overspending by employees.
  3. Reduces the time taken to track and resolve any policy violations.
  • Streamline the entire corporate credit card reconciliation process

Implementing a robust expense management software can save valuable time and can quickly help identify and rectify errors. It also ensures the company stays ahead with its audit and tax filing. Lastly, it works as an active catalyst in increasing employee compliance.

The credit card reconciliation process consists of several phases and processes. These processes need to be followed to the dot to avoid any execution errors. Having a clear view of roles and responsibilities helps teams to stay prepared. 

Additionally, all stakeholders are well-aware of the process, rules, and consequences of not following them. This ensures transparency across the company. 

In conclusion 

The corporate credit card reconciliation process is a crucial task for understanding the financial standing of a company. It is also a necessary process to check if your employees are indulging in any fraudulent behavior. Lastly, it helps identify and solve credit card errors and settle disputes with banks and vendors, if necessary. 

Manual, paper-based methods can become a complicated procedure involving government policies and your employee’s time and money as well. But this is a tedious and time-consuming process that can be eased by the use of technology.

Do you want to upgrade the way your business  reconciles credit card spends? Fyle comes equipped with features like automated reminders, duplicate detection, and card transaction reversals to make the reconciliation process seamless.

Schedule a demo today to make expense management easier, faster, and accurate for all the stakeholders!

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Corporate card reconciliation

How to use Fyle as a credit card management system?

November 19, 2019
|
5
Min Read

Does your finance team have a trusted credit card management system to manage all employee corporate credit card expenses effectively? 

Corporate credit card usage is on the rise due to its ease of use. With these cards, employees no longer need to worry about using their own money for business expenses. But with these cards, it becomes all the more critical to effectively track, monitor, and stay on top of things. If ignored, it can rack up extra chores for the entire team. Even worse, it could severely affect your company's bottom-line due to prolonged financial leaks. 

But how does one go about picking the right credit card management system for their business?

In this article, we talk about how Fyle as an expense management software can help your finance team tackle challenges related to credit card management and more. Let's dive in!

Does your business need an effective credit card management system?

Credit cards as a payment method have their own set of pros, but keeping track of spending can be difficult. Even a simple task can become demanding, taking up time and effort from your finance team and employees. Traditional methods for managing credit cards, bring with them a set of challenges that could pose a threat to the financial productivity of your business. Here’s why:

  • When you have multiple cards assigned to multiple employees, keeping track of usage becomes a challenge. 
  • With hundreds of incoming transaction statements, it’s easy to miss out or make entry errors while reconciling. 
  • When your finance team doesn’t have real-time visibility into the employee’s expenses, it can lead to fraud. 
  • Spotless accounting and staying audit-ready becomes challenging, potentially putting the business at stake with the IRS.

SUGGESTED READ:

Best Practices to manage Corporate Credit Cards

Fyle as a credit card management system

Fyle has several features that can help you ease your corporate credit management woes. Our automated solution makes sure all the monotonous routines around expense reporting and corporate card management are taken care of. This spares extra time for your finance team to do more intuitive work and put their skills to better use. This also increases productivity and boosts the morale of your team as well.

Fyle as your credit card management system can help you achieve multiple goals in a short period. Here’s a look at some of them:

  • With Fyle, you can manage multiple cards and cardholders seamlessly.
  • You can track employee spends to ensure no overspending.
  • You can easily validate and reconcile credit card expenses with direct bank feeds.
  • Accounting and staying audit-ready becomes a breeze with a unified dashboard.

Assign and keep track of all your corporate credit cards

Irrespective of whether you’re a small business with few cardholders or a large enterprise with multiple cardholders, Fyle allows you to manage all your corporate credit cards with ease. Once your organization’s card feed is set-up, you can easily assign your company’s credit cards to your employees. Additionally, your finance team can also track and monitor all assigned and unassigned cards. This provides for a wholesome approach to effectively managing business credit card expenses. 

View and track all your corporate credit card expenses

On assigning cards to users, all the expenses incurred will be directly reflected in your Fyle account. The finance team can then view all the payments made using credit cards. They can also see which of the corresponding expenses are yet to be reported. Additionally, the team can filter and view expenses for desired timelines. Lastly, finance folks can also customize and send timely reminders to employees to match their expenses on time.

Get direct feeds from the bank

When multiple employees are assigned to various credit card providers, tracking all the transactions in their bank feed can be a demanding task. Fyle takes care of this problem by syncing all your corporate credit card details with direct bank feeds. By integrating directly with the bank providers, you can expect to get a clean feed in real-time. Additionally, we provide a reliable data flow of all your corporate card expenses. This ensures complete protection over your company’s bottom-line.

Handle credit card reversals

Sometimes a merchant may unintentionally charge twice for a purchase made through the corporate’s credit card. While it may not be a significant loss, it is necessary to make a note of for accounting purposes - duplicated charges can cause confusion and imbalanced records.

At Fyle, we understand finance teams can easily miss transaction reversals, leading to accounting errors. This is why we created our feature that seamlessly matches every expense to its corresponding transactions. 

Pro-tip:

In cases of extra charges, employees need to support their claim with the help of receipts and relevant expense entries.

Ensure seamless accounting

With a better credit card management system in your hand, you can stay prepared for the tax season as well as for audits. Fyle makes sure that your finance team stays ready without rushing or worrying at the last minute. Our expense management software comes loaded with features that can help your finance team tackle the challenges of accounting. Here are few such instances:

  • Finance teams can configure and send automated reminders to employees to match their expenses on time. 
  • With an automated reconciliation process, the finance team can stay tax-ready as well as exercise their skills in a more meaningful way.
  • Fyle can easily integrate and manage a wide array of corporate credit cards. Whether your employees use Mastercard, VISA, Diner's Club, or American Express, it can be directly integrated with the software.

Choose Fyle to effectively manage your corporate credit card expenses

Choosing to handle your corporate credit cards in the old-fashioned way brings numerous challenges tied to it. You may have cards from multiple card providers to suit your needs, but tracking its usage through disparate systems becomes a whole other problem. When you do not own a centralized software to track all cards, identifying assigned cards can be confusing as well. Additionally, when it comes to staying audit-ready, tasks such as reconciliation can become taxing on your finance team.

At Fyle, we understand the challenges that come with managing corporate credit cards for your business. Thus, we have come up with features that will ease the burden on your finance team. This means automating mundane tasks, easy integration, providing direct bank feeds, and matching expenses accurately. With our features available at your disposal, your finance team’s productivity can be optimized and enhanced to help meet business goals.

Want to know more? Schedule a demo with us today to see how Fyle magic works!

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