Many businesses incur significant costs from client entertainment and meal allowances for employees on business trips. While these are often necessary parts of business, the expense claims can be poorly monitored, potentially leading to overspending and other misuse.
Business dining makes up a considerable portion of the average business travel and expense budget, so it should be accurately tracked and managed.
Taking team members or clients out for a meal can be an opportunity to start or nurture a great working relationship.
However, it is important that your business has clear policies in place for meal expenses, including how they are claimed.
This is essential for budget planning, managing costs, ensuring compliance with the fringe benefits tax and preventing the misuse of the company entertainment budget.
To ensure that the expense policy is followed, businesses need to simplify the process of submitting expense claims and approve payments quickly.
Employees need to be able to submit their expenses and receive approved payments quickly. This helps to ensure they are not out of pocket for work-related events, and also means the business can track spending across the month more accurately.
A recent Concur survey found that 65 per cent of employees report that they still claim expenses by submitting paper receipts to managers.
Businesses should look to online expense management tools and their supporting apps to improve the expense management process.
Relying on paper receipts costs businesses time and money due to the time it takes to process them, and the potential for errors, duplicate claims and lost receipts.
It can also leave the business more at risk of non-compliance with tax legislation, and the associated fines. The Concur research showed Australian SMEs could save up to $44,000 per year by reducing their duplicate claims.
Automation is the most reliable way to optimise an organisation’s expense management. When expenses are managed via spreadsheets or paper-based forms, mistakes are bound to be made, including duplications.
By contrast, organisations that implement automated, integrated, end-to-end travel and expense management systems can reap the benefits of time savings, increased visibility and better reporting.
Automated expense reporting also reduces the need for daily meal allowances for travelling employees, as they can lodge their claims on the spot and fast-track approval. This ensures that all claims are within the policy guidelines and are lodged correctly.
It also reduces the burden on the finance team as expenses are not lodged all at once at the end of the month, as is typically seen in paper-based systems.
Automated expense reporting means that finance teams no longer need to waste massive amounts of time re-keying data into spreadsheets, chasing employees for further information, chasing managerial approval and cross-checking each claim against ATO guidelines and company policy, which can result in a bottleneck of claims.
By automating the expense administration process, the finance team’s time can also be better spent on value-added tasks, such as helping to budget and forecast, or claiming back taxes.
There are six key benefits of automated travel and expense management systems:
1. A strong platform means one user experience, one set of reconciled data and one source of truth for analytics and reporting.
2. Automated systems can be configured to align with company rules and policies, including preferred hotels and airlines and maximum spending limits according to the type of travel.
3. The system can be configured with data that is specific to the organisation, such as employee IDs, project codes and customer accounts.
4. There is potential to connect with customer relationship management (CRM) systems to understand the cost of sale per customer.
5. They offer a real-time view of how each project is performing according to budget.
6. They deliver a better understanding of where employees are and how to maximise employee satisfaction and productivity.
Supporting employees with better expense management tools can make a significant impact when it comes to efficiency and productivity, both for employees who need to claim expenses and for the finance department and managers who need to process and approve expenses.
By providing the right technology and tools for employees, coupled with a clear expense policy, businesses can achieve greater transparency across their expenses to reveal the areas where costs can be scaled back, including business dining.
Matt Goss is the Australian and New Zealand managing director for Concur, an international travel management business.