Your sales employees are always on the move. But do you know what slows them down? – Reporting employee travel expenses!
As sales folks, they may incur a varied range of expenses. Some everyday business expenses incurred are transportation, dining, accommodation, and other miscellaneous expenses. A study conducted by GBTA states that: “Business travel is estimated to grow to $1.6 trillion in annual spends by the year 2020.” This means that you can no longer take your business expenses and employee travel expenses lightly. But does your business efficiently manage these expenses? In this article, we look into the key elements that constitute employee tracking software help in travel expenses. Additionally, we understand the protocol behind qualifying these business expenses. What are employee travel expenses? Any business expenses incurred towards a specific business goal completion are known as employee travel expenses. This goal can be a regular client meeting, a closing of a business deal, or even your employees attending a business-related seminar. As a business looking to streamline their business processes, it is crucial you consistently keep a tab of your company spends. Additionally, insights into these spending patterns and trends can help you cut and optimize costs for your business. When are employee travel expenses considered valid? As per IRS regulations, a business spend is considered valid if: It is an ordinary business spend: This type of expense is one that is widely accepted in the industry as a business spend. It is a necessary business spend: This type of expense is one that is considered necessary for the growth of the business. Types of employee travel expenses incurred on a business trip: reimbursable-employee-travel-expenses The above are the primary types of business travel expenses incurred by your employees while on a business trip. These expenses can happen either via cash advances provided by the company, using corporate credit cards or prepaid cards, or employees using their own money. Every state has defined laws and regulations on employee reimbursements and standard mileage rates. Ensure you have an accountable plan to stay compliant at all times. Additionally, ensure you have the right type of customized fields in your expense report template in an attempt to remain compliant. The process of expense reimbursement for employee travel expenses? Expense reimbursement is the process in which the employer repays the employee for any business expenses incurred by him or her during the business trip. On completing the business trip, the employee needs to report these expenses on an expense report form provided by the employer or the finance team. Once the employee fills in these details through expense management software, the approver or reporting manager also needs to validate these entries. The fields entered in an expense report play an important role in streamlining your business processes. Using these fields, finance teams can cross-check and validate the entries found on the expense report form. SUGGESTED READS: How to track expenses on an expense report form? How to effectively track Per Diems in an expense report form? How can businesses track mileage using an expense report form? Once approved by the finance team, the particular expense report is approved and sent across for payment processing. Care must be taken by the finance teams and employers to ensure that the employee travel expenses comply with the IRS regulations. An expense report is accepted and pushed into the reimbursement cycle only if it has a direct and clear business agenda behind it. Once processed, the employer is deducted 50% of the cost, and the employees are ideally reimbursed 100% of the expenses incurred by them. Measures to keep in mind while evaluating employee travel expenses: Document the purpose behind the spends: To stay compliant with the IRS, all business spends in the expense report needs to have a clear connection with a business goal. Document valid receipts for business spends: As per the regulations, your reimbursable employees need to produce bills if they exceed a particular limit. But, as a best practice, always collect receipts as evidence of business expense claims. Tally claimed business spends with expense reports: For cash advances, the employee needs to document and submit all the business expenses incurred. Unused money needs to be given back to the finance teams. This is done to avoid the balance amount from becoming taxable income for the employees. As an essential means to stay compliant, businesses should: Have an accountable plan which documents everything regarding your business expenses per IRS regulations. Companies must have a well-defined travel and expense policy. Companies should work towards effectively communicating the policy with the employees. This helps them understand their spending limits according to their designations or nature of work. Companies should document expense claims with the corresponding evidence of spends. SUGGESTED READ: How to create an plan for reimbursing employee travel expenses? Using non-reimbursable entries in expense reports Employee travel expenses and expense management: Not staying compliant may not only put you in trouble but can also result in these expenses becoming taxable income. While a traditional expense report may graze the surface, an automated expense management software can do much more! Fyle helps you monitor and approve spends on-the- go. Additionally, you can access data to all employee spends under one dashboard. Also, Fyle’s real-time policy engine ensures no employee expense claims burn a hole in your pocket. Increase internal compliance and financial productivity of your organization with Fyle. Schedule a demo to understand how Fyle can address your expense management needs. In today’s fast-moving world, time is money. Businesses are automating every possible task to save time to make more money. Expense management too, is in a transitional phase. Many companies are switching to an automated expense management software to expedite and upgrade the process of expense reporting, approval, and reimbursement. By doing so, they enjoy the benefits of dynamic automation that reduces both work and errors. Advantages of using an expense management software: Reporting of employee business expenses is device agnostic. This cuts down the tedious manual work and efforts involved in collecting and storing physical receipts. Employers and finance teams can customize policies and approval workflows as per their business requirements. This helps them record and document important business findings. Most expense management software can integrate with card programs, accounting software, and travel management systems to contain discrepancies. This helps finance teams maintain all the information under one platform. Employers can gain insight into spending trends by using analytics and statistics of past data. This helps finance teams to make well-informed business decisions. An automated expense management software checks for policy violations in real-time and reconciles expenses with bank feeds automatically. This not only helps save time but also ensures no fraudulent expense claims go unrecognized. Every uploaded expense report has a digital audit trail of all actions ever taken on it. This helps keep the expenses ready for accounting and auditing purposes. Users can personalize expense and user fields to make sure the system has all the required information before processing a business expense claim. This helps streamline the entire process of expense management within your company. An automated expense management software not only eliminates the risks and hidden costs involved in expense reporting but also eases out the entire process. It also decreases unnecessary manual work for both your employees and finance teams. An automated expense management software is what a growing business of today needs. It helps ease out the process of expense reporting for your employees. It also proves to be more efficient for your finance teams to record and manage business expenses for accounting and planning purposes. It is safe to say that in this modern age, an automated expense management software is a state-of-the-art tool that helps save time and resources in a compliant and user-friendly way. 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Traditional ways of reporting and reimbursing expenses involve many unnecessary issues and risks. They include manual handling of physical receipts and manual verifications which are prone to fraud and error. The inefficiency of traditional expense management further weakens your employee morale, financial productivity, and your bottom line. To mitigate these risks, most leading companies resort to using expense management software.
Using expense management software makes life easier for expense reporters as well as accountants and approvers. In today’s eco-friendly and efficient work culture, it is a must-have tool for scale. In this article, we discuss what expense management is and why it plays a crucial role in your business. What is expense management? A business regularly incurs costs and expenses to keep its engine running and its wheels rolling. These expenses are essential for the business to maintain and expand its operations and production. As a company grows, the quantum of spending and spenders grow too. It’s important to note that it’s not always the investors that spend on a business. The employees also incur personal costs to keep the business running. These expenses are something the company owes to its employees. They are also responsible for repaying them as soon as possible with minimal effort or resistance. However, to compensate for a cost, an employee should first report their business expenses. They do so, in the form of an expense report with tabulated business spends, the purpose of spend and more. These expense reports are then verified, approved, and reimbursed. What is expense management software? As the name suggests, an expense management software is an application that helps employees manage and report their business expenses. Additionally, it is also used by finance teams to manage reimbursements, expense reports, and travel requests. An automated expense management software streamlines every aspect of expense management to minimize the risks associated with traditional expense management. It enables a business to receive and process business expense reports from its traveling employees. Additionally, it also checks these expense reports for policy violations before reimbursing them. The basic elements of expense management remain the same, but the elimination of manual submission and checks make a huge difference to everyone involved. What does expense management software do?
Presenting the proof of your business expenses in the form of receipts is an essential step for reporting your business expenses. An expense management software provides multiple ways to its users to upload, update, and submit the information on their business spending.
Expense management software automates the process of policy checks and enforcement. It comes with various in-built features to ensure that policy violations are tracked and mitigated effectively.
Once a business expense is uploaded, the software scrutinizes it and forwards it to the respective stakeholders. If it finds the expense in violation of a policy, it notifies the approver and the employee by flagging the expense and bringing it to their attention.
Why should you use expense management software? In today’s fast-moving world, time is money. Businesses are automating every possible task to save time to make more money. Expense management to is in a transitional phase. Many companies are switching to automated expense management software to expedite and upgrade the process of expense reporting, approval, and reimbursement. By doing so, they enjoy the benefits of dynamic automation that reduces both work and errors. Advantages of using expense management software:
An automated expense management software not only eliminates the risks and hidden costs involved in expense reporting but also eases out the entire process. It also decreases unnecessary manual work for both your employees and finance teams. An automated expense management software is what a growing business of today needs. It helps ease out the process of expense reporting for your employees. It also proves to be more efficient for your finance teams to record and manage business expenses for accounting and planning purposes. It is safe to say that in this modern age, an automated expense management software is a state-of-the-art tool that helps save time and resources in a compliant and user-friendly way. Next To Know |