Cashflow management is exceptionally critical in businesses, especially SMEs. However, cash flow can be challenging to control, and one can see benefits from strict monitoring. SMEs find it hard to manage, and around 63% of SMEs worry about cashflows. If the business expenses exceed the incoming cash flow, there is a cash flow problem.
It is crucial for SMEs to look at different areas of expenditure and identify long-term and short-term savings. One such area often overlooked is corporate travel expenses. The proper management of expenses gives businesses an added advantage. SMEs should evaluate their current expense procedures and enforce policies to make sure employees are not being taken advantage of.
Various expense areas are easy to manipulate, and we tend to see different claiming behavior across multiple business processes. Not submitting expenses on time is one of the biggest challenges that SMEs face. Employees should be able to quickly claim funds without disturbing the business cash flow.
The ideal way to encourage employees to submit expense claims is to restrict the timeframe in which employees can submit claims. Defining a time limit of one to two months encourage employees to stay up-to-date with claims. It would not only impact the financial flow of the business but also makes the verification and validation easy for employees.
The second most challenging area of the expense process is the submission of fraudulent claims. Not all employees will manipulate the expense system, but it is vital for SMEs to carry out proper diligence and check the information submitted to them. Whether it is creating duplicate invoices or pocketing the accommodation allowance or claiming reimbursements for the same journey, businesses should ensure that the expense claims are genuine; otherwise, employees will take advantage of the tax-free money. Establishing clear policies in place can help employees easily navigate the expense process, but, what if employees don’t find time to check receipts?
SMEs are leveraging the cloud-based solutions to streamline their business operations. Implementing an automated expense management software can help check expense claims and enables you to control employee spending by automating policy enforcement. This means out-of-policy expenses can be ruled out from submission. If there are duplicate claims or those that go beyond spending policies, the system would automatically flag those and return to administrator and employee for re-submission.
With the expense policies clearly defined, employees can make wise spending choices before making a purchase. This enables businesses to watch what employees are spending for, instead of waiting till the moment they submit an expense report. With SutiExpense, employees can capture receipts, and the OCR technology can read receipts without having to enter the data manually. It helps SMEs tackle the misuse of expense process and allows you to manage cash flow effectively.
Leveraging automation in the expense report process can help SMEs maximize VAT and enables positive cash flow. By encouraging employees to classify claims such as travel, meals, or accommodation, businesses can make sure they are paying the right VAT on the expenses and purchases.
For enterprises, it is crucial to identify loopholes in the expense process as they can have significant impact on the cash flow. The ability to manage and control employee expenses would not only save your time and money but ensures that the right processes are in place, so your money will not fall out of the cracks. By staying on top of spending and having complete visibility will help business owners control employee spending and make informed decisions related to spending activities.
Only by staying on top of outgoings and having full visibility allows business owners to stay on top of spending, thus making data-driven decisions.