A company runs at its maximum potential when everyone is on the same page. This includes both in-house employees and remote employees. Whether it's for a pulling off a marketing strategy, endorsing best practices for operations, or recommending safety protocols, they must align with your business goals.
One such topic is the need for expense policy compliance from all of your staffing employees. There are several benefits of staying compliant with your expense policy. It not only helps you stay out of trouble with the IRS but also helps mitigate risks and potential fraud. In this article, we delve into the nuances of expense policy compliance and why your business must push for it. Let's dive in!
Benefits of expense policy compliance
- Streamlining of business processes around expense reporting
- With the streamlining of business processes, several aspects of your business will be relieved from constant back and forths and process errors. This results in the overall reduction of processing time.
- With neatly outlined workflows the quick processing of expense reports will expedite the entire process of expense reporting. This will result in your employees receiving their reimbursement faster than ever before.
- Automated policy enforcement makes sure expense reports line up with your expense policy. This ensures no policy-violated expenses get approved.
- With clearly outlined processes, you'll witness your employees having lesser frustration over the expense reimbursement process that your company has in place.
- Exclusion of errors during expense report processing
One of the most significant setbacks for your business's expense processing is errors. They can pop up from things such as insufficient data entry, manual errors or a simple lack of guidance. This is where an automated expense management software comes into play. An automated system simplifies the entire process for both the employees and the finance teams. This ensures all expense reports are in line with your company rules.
- Elimination of corporate expense fraud due to false expense items
Your company expense policy can explicitly define limits on things like the monthly car allowance amount, what items can and can't be expensed, etc. This helps your company avoid one of the most detrimental aspects to most businesses in corporate America: fraud.
Fraud can happen in a lot of different ways on your employee's expense reports without expense policy compliance. There can be fake reports on the amount, duplication of the same items, or entirely false items.
While your employees may be the salt-of-the-earth type, eliminating certain temptations for fraud can always help keep everyone accountable. Compliance and understanding of your policies can be a huge help in preventing fraud.
There are other ways that you can prevent fraud. One such method is implementing a corporate card program to all necessary personnel. Corporate card usage decreases or altogether eliminates the possibility of fraud among your in-house staff.
- Adopt an expense management software to address your needs
Having an automated policy enforcement tool will guide your employees through your policy and help them understand it better. With this, your employees no longer need to waste company time digging through an employee handbook to find the information they need. The automated system will spell it all out for them.
Anything such as travel expenses, car allowance, petty cash, etc. can be input in the system to improve compliance. A knowledgeable employee is a happy employee, the rules you have will become second nature to them, thanks to the system you have to guide them through it.
Best practices for expense policy compliance
Your company expense policies are in place for a reason. Rather than just stating them as law for your employees, promoting compliance will help them understand the logic behind those policies. This is incredibly valuable to your employee's happiness. Here are some easy ways to do so:
- Integrate a few financial benefits to those that follow your company policy. This will help increase expense policy compliance among your employees.
- Pair that with an automated expense management system that will help your employees take notice of the policy. This will result in your employees building better spending habits.
For example, having a good understanding of your mileage policy will help your employees to make better spending decisions. They'll be more aware of factors such as the routes they take and the pit-stops they make.
How can businesses achieve expense policy compliance?
Businesses cannot underestimate how crucial expense policy compliance is for both the business and the financial staff. Having your employees in a place where they understand company policy can streamline several other departments in your business.
Most businesses that depend on traditional methods to encourage expense report compliance, often fail. This is due to the dependency on human intervention at every step. To combat this, businesses that are process-oriented are now moving towards automated expense management softwares. These softwares not only simplify the process but also seamlessly provide expense policy compliance from the back-end.
Fyle can help put an end to all your expense management challenges while also ensuring expense policy compliance. For more inquiries, please reach out by scheduling a demo today!