Automated Expense Reports,  Business Expenses,  Compliance,  Expense Management,  Expense Policies,  Travel Expense Management

Managing Corporate Cards with an Expense Management Software

Employees traveling on business trips, always face one common problem – making sudden spends.

These spends could either be for client meetings, dinners, or even informal meetings. Furthermore, as a company aiming for scale, it is crucial for you to make your presence felt in the industry. This would require you to hold seminars, webinars and other such on-site and off-site events.

However, these variables most often require immediate cash or card payments. Making employees spend their personal money on business trips have their disadvantages. Combating these shortcomings, corporate cards have proven as an effective way of handling business expenses.

In this article, you will understand the nuances of making and managing business card spends. Additionally, you will appreciate the need for an automated expense management software to help manage and streamline your business spends.

Challenges of employees using cash or personal cards:

  • Difficulty in tracking and monitoring employee spends
  • Risk of employees endorsing fraudulent behavior
  • Employees may not have the financial bandwidth to spend their own money on business spends
  • Employees may not have personal cards to spend on business spends
  • Not reimbursing employees on time, may account for them not paying their bills on time. This can further impact your employee’s credit scores. This would further make them unwilling to spend their own money in terms of physical cash or card payments for business spends

Benefits of using corporate cards on business spends:

  • Convenient means of going about business: With prepaid or corporate cards, employees would not have to spend their own money on business travels.
  • Multiple users can use a single card: If you are a small business, with only a few traveling employees, you can use business cards interchangeably amongst your traveling employees.
  • Greater control on employee spends: With capping amounts, admin approvals for high value spends, and direct bank sync, employers can have greater control over employee spends.
  • Ease of making an expense: Without the requirement to lug around real cash or employees fearing the use of personal spends, business card spends are gaining predominance due to its ease of use.
  • An effective manner of managing expense claims: Card payments with an integration to an accounting or expense management software can help provide a streamlined process for managing business expenses.

How does expense management tie with managing card spends?

Though card options for making business spends is the best, there are still a few challenges associated with them. To help combat these challenges, it is essential for businesses to associate with an automated expense management software. Automated solutions help streamline processes by adding a layer of transparency to them.

With an expense management solution doing the back-end work, businesses can seamlessly manage fyled expenses. Some of the features that help address expense management challenges are automatic policy checks, flagging of fraudulent and duplicate claims, insight into data trends – spend categories, frequently associated vendors, frequent travelers, and more. Simply put, it automates all things unnecessary, so that you could attend to more daunting tasks.

Ideal features of an automated expense management software:

  1. Cashless transactions with no burden on employees to use their personal cards or money – This helps build employee morale and overall satisfaction that you care about their circumstances before putting them in a position to spend for the company.
  2. Faster processing of expense claims – With direct sync of the bank feed with an automated expense management software, businesses have insight into claims even before employees submit expense reports.
  3. Real-time insight into spending trends – Having an in-depth insight into spending trends can help you identify frequent spenders, frequently associated vendors and more. This further helps in negotiating business discounts and deals on hotels, flights and more.
  4. Enhanced control on employee spends – With clear policies, capping amounts and admin controls, businesses can curb unnecessary spends.
  5. Greater policy compliance – With real-time policy checks, flagging of fraudulent claims, and other such features, employees have to remain compliant to get reimbursed.
  6. Streamlined and paperless expense workflows – With direct synced feeds, businesses no longer need to depend on spreadsheets and paper receipts to manage their business spends.
  7. Integration with preferred accounting software – To add a layer of structure, these spends need to be integrated with accounting and expense management softwares. With the option to integrate with softwares of your choice, businesses can further streamline their processes.
  8. Report expenses on-the-go – Employees can simply click pictures of receipts and upload them in bulk. They can also directly fyle expenses from their inboxes. This helps them report expenses, anywhere, anytime.
  9. Real-time policy violation checks – With real-time policy checks, employees and the admins will be notified, in case of policy violations. Additionally, the responses are recorded in the form of a digital audit trail, ensuring you stay audit ready, at all times.
  10. Flagging of duplicate, fraudulent claims at source – This is the single most important feature to help eradicate fraudulent claims. With the fear of getting spotted, employees would most likely always have to be compliant with your organisation’s travel and expense policies.
  11. Increased accountability and transparency into spend claims – With the above features in place, employees and employers benefit from a streamlined and transparent reimbursement process.

Benefits of using corporate cards and automated expense management software:

  1. Automate card feed sync – Businesses can directly sync bank feeds from multiple banks and multiple card programs. This allows them to seamlessly manage their expenses, irrespective of the number of cards or modes of payments they use.
  2. Reconcile expenses – Businesses can reconcile expenses with exact or near matches. They can also create an expense if one doesn’t already exist within the expense management software.
  3. Account for personal expenses – With this feature, businesses can quickly separate personal expenses from business ones, within a few clicks.
  4. Manage multiple card programs – Irrespective of the number of card programs your employees use, businesses can always seamlessly manage spends.
  5. Run policy checks on card expenses – When you sync your corporate card statements, expense management software ideally will run real-time policy checks on every submitted expense.
  6. Split expenses – Businesses can split card expenses and assign them to distinct projects and cost centers while checking them for policy violations.
  7. Duplicate detections – An automated expense management software detects and flags duplicate expenses. Admins no longer have to go through these expenses manually.
  8. Pre-submission checks – With these checks, employees are presented with violation notification before they can create a corporate card expense. This lets them be more compliant as opposed to checks which happen after submission.
  9. Admin controls – With admin controls, you can quickly filter out the reconciled and reconciled expenses and send one-click reminders to employees to match and submit expenses.

Tips on managing employee spends on corporate cards:

Businesses using multiple cards, be it prepaid or corporate credit cards are common. What’s also common is the rampant rise in fraudulent claims. Most often, these claims go unnoticed when dealing with expense claims made on personal cards or using employee money.

Here are some tips to help you manage card spends better:

  • Draft effective travel and expense policies

Most often your traveling employees have little to no insight into a company’s travel and expense policies. This results in a rise in policy violations and fraud. An effective way of solving this challenge is to create easy-to-understand travel and expense policies. But, the buck doesn’t stop here. Businesses should also ensure these policies and communicated with traveling employees to ensure maximum compliance and minimum policy violations.

While drafting expense policies, ensure you effectively communicate, in fact over-communicate the specifics. This could include capping amounts on specific category spends, allowable expenses, and the particulars to be filled out in the expense reports. Additionally, it is crucial to spell out the consequences for fraudulent claims and personal spends on corporate cards.

Benefits of using effective policies in expense management:

  1. Streamlined and defined processes to manage expenses
  2. An increase in policy compliance
  3. A decrease in policy violations
  4. A reduction of fraudulent behavior
  5. Insight into spend trends, spend categories
  6. Information on most frequent spenders and vendors
  • Ensure admin control on spends

While the spending power still lies with your employees, there are certain things you as an admin can still control. With the use of associated tools such as expense management software, you can keep a tab on spends. Here, you can use alerts, limit and monitor recorded spends, evaluate spending patterns of employees and more.

  • Use data analytics:
  1. Declutter fragmented data: With data analytics, you can add an associated value to all your business hypothesis; and accordingly, approve or disapprove claimed expenses. Additionally, adding a layer of objectivity will help you make well-informed business decisions.
  2. A gold mine of information: Be it to validate, approve or disapprove business assumptions, it is important to have insight into what the numbers have to say. Data on spending trends, spending categories, frequent high-budgeted spenders and more, allow businesses to understand, modify or adapt to better policies.
  3. Return over investments: The primary goal of any business is to make profits. Keeping track and measuring your ROIs is an ideal way of continually checking the health of your business. With insight into numbers, companies can easily keep track of ROIs and make necessary amends, where need be.
  4. Greater transparency and visibility into spending trends: Simply put, transparency and clarity have a direct impact on your business image. Transparency into business spends, and policy violations can help business keep the cash leak in check. Insight into these numbers, lead to businesses identifying key problem areas in the company. This could lead to better-structured frameworks to help increase compliance.
  • Check and monitor employee spends

It is essential for businesses to make sure they are not victim to fraudulent claims. Even though these claims appear small at first, they can be detrimental to your business in the long run. Hence, reviewing spends regularly and calling out spends which seem fraudulent, over-exaggerated or duplicate in nature, help curb such spends. This is an ideal manner of spotting fraudulent expenses, even before the employee submits an expense report.

  • Approval on high value spends

As a precautionary measure, you can always set criteria for approvals, if expenses exceed a certain amount. Placing a cap, and authorization for higher value spends can help curb unnecessary spends. Additionally, with this approval system, admins and approving managers will have documented proof on these spends. While this tip only works for high-value spends, having an automated expense management software, may help address your overall expense management challenges.

With an expense management software, you can run real-time policy checks, gain insight into flagged claims due to fraudulent or misrepresented claims and more. While running a business, it is essential to critically evaluate the leak in resources and put a long term fix to it. An automated expense management software in this case, may just be the answer.

Shruti Kesavan, aka K7, is the Editor at Fyle. When not convincing people to automate their expense management, she loves to read, travel, and explore with the world with her pup. Be sure to drop her a note at [email protected], if you're looking for any guest blogging opportunities.

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