Remote work is an emerging trend in the modern workforce. More and more companies are hiring remote employees to save on overhead, increase flexibility, and foster creativity.
There's a lot of benefits for both employer and employee - but with this comes new challenges like time zone differences, different tax laws, or cost-of-living adjustments.
That said, perhaps the biggest challenge that business owners face when running a remote team is managing employee expenses.
The following tips will help you manage company spending for remote teams:
When it comes to managing expenses, the best thing you can do is centralize all information in one place.
A cloud-based spend management platform like Penny Inc can make your life much easier when it comes to organizing and keeping track of employee spending both during and after travel.
By centralizing all your spending data, you'll be able to have visibility into company spending and identify areas that can be improved. You'll also have a much easier time preparing reports for your team as well as preparing expense reports at the end of each month.
Note that, it's important that all your employees use the same tool to avoid any potential discrepancies and ensure accurate information is stored.
Some of the best expense management tools allow remote employees to submit their expenses directly from their phone or laptop. This saves a lot of time and hassle and can be done within just a few minutes.
The faster an employee can file their expenses, the less likely they'll file them incorrectly or forget to do it altogether.
While some companies require paper receipts for any expenses over a certain amount, this can often result in needless paperwork and expense reports.
When you have a remote workforce that might be working from a different country or time zone depending on the day, receipts can quickly turn into a logistical nightmare.
Using a receipt scanner can save you from this hassle. Not only will it help save time for your employees, but it'll also save them money because they won't have to pay for a wire transfer or courier service.
If an expense is approved by a manager or another co-worker who has been designated for this responsibility, then that should be enough on its own unless it seems suspicious based on past spending habits.
By micromanaging your employees’ expenses you run the risk of ruining your team’s morale.
In the eyes of your employees, it may seem that you don’t trust them enough to use company funds responsibly, and their confidence may be undermined. What follows is a possible turnover rate, and that’s the last thing you’d want with your remote team.
When you have a remote workforce, it's important to streamline your expense reporting process as much as possible. You don't want to waste any of your employees' time or make them jump through unnecessary hoops in order to get reimbursed for an approved business expense.
As such, the easier and faster you can approve expenses and reimburse your team - the better. However, this can be difficult with large companies that have numerous approval processes in place for expense reports.
The best thing you can do is make sure all your employees use a common tool to file their expenses and avoid any additional approvals whenever possible. If you need to, only require the CEO or CFO of the company to approve more expensive expenses.
It might be useful to issue virtual expense cards to your employees so they can easily track and manage their spending. You can set monthly limits on the cards to ensure that expenses stay within the approved budget - but at the same time, this will allow your employees more freedom, as they won’t feel micromanaged.
Another good idea is to set limits based on your employees’ role within the company or give them cards with various spending limits so they only pay for what they need.
By setting up credit cards, you can avoid lengthy expense reports altogether and allow your employees the freedom to submit their expenses without having to wait for approval.
The longer it takes for an expense report to get approved and reimbursed, the less time your employees will have working on your company's projects. This can result in delayed output which is something you definitely want to avoid. Slow reimbursements also dent company morale -- no employee wants to wait ages to receive a reimbursement.
A mobile expense tracking software helps your team track their expenses with ease, and gives you visibility over their spending no matter where they happen to be in the world.
Luckily, there are a lot of platforms that allow your employees to take pictures of receipts and put them into one central location; so you can easily review them or reimburse them for what was purchased.
To make your life easier, choose a service that offers automatic mileage tracking so all driving expenditures are entered automatically without any extra effort from your employees. And if you need an extra layer of security - set up encryption protocols so only authorized people have access to these expenses.
Without a good solution in place, it will be difficult for your employees and managers to manage their employee's expenses in a timely manner and ensure they get reimbursed quickly. Like we’ve mentioned earlier, you don't want delays between when an expense was incurred and when the person is reimbursed - so having mobile expense tracking software that does all this work for you can definitely streamline the process.
You can sign up for a free Penny Inc account today to take control over your employees’ spending.
As your company grows, you may find yourself struggling to keep up with the volume of expenses on your own, which can lead to oversights and mistakes that affect your financial reports. Don't let this happen to you. In this blog post, we'll be discussing six tell-tale signs that indicate it's time for a new expense management system for your business.