The world we once knew is no more. A deadly virus haunts us and has greatly enforced remote working conditions in almost every sector. With the rise in remote processes, you, as managers, might find it tough to monitor workflows and associated expenses.
With businesses becoming hyperfocused on optimizing and saving for costs post the pandemic, it has become crucial for companies to monitor expenses effectively and reimburse employees the right way. To help you with this, we've put together a few ways in which you can perform expense management efficiently for remote teams. So, let's get started!
Common Remote Work Expenses Businesses Incur
Before discussing how you can manage expenses, we will detail the common remote work expenses that businesses experience. Keep in mind that these are expenses that employees pay for on behalf of the company.
- Internet charges: The Internet is indispensable for remote work. Hence, businesses need to cover an employee's internet expenses every month.
- Electronic equipment: Nowadays, every job and employee requires technological tools and equipment to carry out day-to-day work, especially those working in the IT field. Not all employees have the right equipment to maintain production rates. You might need to provide them with a laptop/computer and necessary accessories to set up a proper working environment.
- Software subscription: You might have collective access to software for systems connected to the same network in your office. However, your employees may need to sign up for new services that make work more efficient. It is the responsibility of the business to incur such expenses as well.
- Workspace setup: An ideal work environment will keep your employees in their productive mode. So, you need to pay for a typical work-from-home setup.
These are the common things you must include in your expense management model. However, there are many other industry-specific expenses that you should consider adding.
Why is remote expense management necessary?
The expenses of remote teams often get overlooked. The only expense that gets reduced is travel expenses. But, there’s an increase in other costs. Let us see why managing your business expenses becomes essential, especially in the remote setup.
- For happier employees: When employees get reimbursed for everything they paid to get the work done, they naturally exude satisfaction. Also, with timely payouts, employees can rest assured that they will be reimbursed for business expenses.
- For promoting accountability: Both employees and employers should show accountability to create a strong bond. The best way to show this is by addressing the challenges your remote employees face. An easy start would be expense management automation that will do the heavy lifting for you while providing you real-time insight and accountability for all things expenses.
- For preventing fraud: Yes, there are instances where remote employees take advantage of the business. They provide receipts that may prove challenging to keep track of. However, having a standard method to monitor expenses creates a fraud-proof system. Plus, it works both ways in preventing loss for the parties involved.
- For better finance management: By installing a proper management system, you are paving the way for easier accounts management. In addition, it will build a reliable cash flow model. Thus, helping you keep track of all the cash flows to and from the business account.
- For saving time: Paper-based methods take a long time to complete, not to mention their impracticality during the current remote work situation. In addition, time management can become stressful when working from home. So, you must help your employees save the small productive time slots by speeding up the process of filing their expenses. A good expense management strategy can do that for you.
Now that we have understood that monitoring expenses for the remote team are essential, we will look at how you can do that.
Ways To Manage The Expenses For A Remote Team
We have compiled some of the common ways adapted by businesses to monitor the expenses of a remote team. Let’s take a look at them in brief.
- Expense management system: An expense management software helps your employees track receipts and update expenses through a simple unified interface. The aim is to simplify keeping track of and verifying expenses. Additionally, the software comes with real-time insights about company-wide remote expenses. This helps businesses find easy and cost-effective ways of optimizing business expenses.
- Dedicated employee cards: You can efficiently keep track of all expenses by giving out employee cards to your remote workers. Furthermore, it creates a trail for every penny spent. So that there’s no hesitation or delay in spending money to keep the workflow intact. You can use a virtual card for each employee or hand them a physical card with a dedicated amount for spending.
- Expenses monitoring: Out-of-pocket expenses monitoring is a dedicated model for managing only the expenses employees make with their own money. This will lead to a better relationship between the company and the employee. Furthermore, a standard system will assure employees that their money will get reimbursed.
- Documentation and digital trails of business expenses: Going remote has resulted in almost all businesses investing in software to get the job done. You might also have many payments to pay out or collect to run day-to-day business operations as a business or service. A free invoice maker can be a good start to documenting and keeping track of expenses.
Incorporating these ways in your expense management model helps you gain trust and reliability. You can effectively reduce employee turnover just by keeping them satisfied.
Why Should We Rely On Software Solutions?
Software solutions make our everyday business process easy. The same applies to using an expense management software. Let’s list some common benefits of using such solutions.
- It makes the process fast and straightforward.
- Provides an option to reimburse employees faster.
- Reduces the errors and delays in processing the payments.
- It gives you a platform for enforcing a standard expense policy.
- It offers better visibility into remote expense management.
- Enables you to create better and more accurate reports.
- It lets you stay compliant and facilitates easy tax calculations.
Managing operational expenses plays a huge role in protecting your bottom line. Remote employees may be scattered across the world and consequently, records and reports can be difficult to maintain. Deploying automated systems that can handle data-entry and manual-work intensive tasks can eliminate errors, frustration, and thankless work for employees.
Further, automated systems for critical processes like bookkeeping and accounting add a strong layer of security for your business and future-proof them in a fast changing global marketplace.