The Methods of Spend Management

Navigating the Spend Management
Source: Business Media Group

This recession has taught us to be more economical. Several companies have adopted various best practices to scrutinize and cut down their cost. As a result, more and more companies are adopting the concept of spend management. This is the process to audit and reimburse the employee-initiated expenses. And this also includes the employee-initiated travel and entertainment expenses. In fact, it has been marked that the major share of employee-initiated expenses is contributed by travel and entertainment expenses. Such expenses are usually committed during business-related travels and business trips.

The following are some of the expenses that come within travel and entertainment expense management.

Under this category, the first expense is the transportation costs. In general, the flight or the train are been provided by the company, in case of a business trip. If not, such costs will come under this category. In addition, the car and taxi rentals fall under transportation expense category. The employees need to keep the bills and present them to the company for documentation purposes.

The hotel accommodations and meals form the major travel and entertainment expenses. The cost of hotel accommodations is something that you can easily keep a record of. In most of the cases, hotel booking is done in advance and thereby the cost is pre-determined. But situations may arise when your employees need to extend their stay and thus are obliged to spend more than your allocated budget. In such case, the employees pay off the accommodation fee from their own pocket and get it reimbursed after the trip. As already mentioned, meals too come under travel expenses and you need to pay them back. Though there are some hotels that offer a complete package including the major meals, most of the times employees need purchase them from outside. Again, in this case, ask your staff to submit the bills for reimbursement.

Though hotel accommodation, food and transportation are the major travel expenses, there are some other expenses that may follow. For example, your employee was about to give a presentation during the business trip and suddenly it became necessary to buy a software or any tool for the presentation. Such miscellaneous expenses also need to be reimbursed. And to track all these expenses you will need to implement an expense management system in your company.

You can implement this spend management system through various methods. The first is using licensed software. It’s a very simple method, all you need to do is to implement expense management software onto your company’s server and allow your account team and other employees to access it. However, this method is rather costly as you need to invest on the hardware and software. In addition, there is the implementation cost that you must pay.

Another method of expense management is getting it outsourced. There are many companies that provide web-based expense management application. The application is managed by the 3rd-party company and through a remote server they allow you to store your expense data and other related information. You can access this information anytime and anywhere. This method is ideal for small and mid sized companies.