It’s important for businesses to accurately control their corporate spend to ensure that each employee is held accountable, whilst avoiding overspending.
It allows for an overview of all types of spending categories, which can often be a complex task, but this process can be made easier.
Corporate spend can be simplified and taken to the next level with spend management software, such as that provided by Mesh Payments, for instance.
But when using this software, what are the best practices?
Set up an approval process
To reduce the possibility of overspending, businesses can stay within budget by requesting purchase approvals from their manager before transactions are finalized.
They can quickly monitor what the spend is for and approve whether it’s an appropriate use of business money.
But what makes these approval processes easier to manage?
The use of virtual corporate cards, instead of physical cards can reduce overspending, as there is more digital insight over corporate spending in one centralized location.
Nowadays, many modern virtual cards include personalized limits and spending rules that can be set up by finance managers or supervisors across the company.
With better visibility of employee spending that’s happening in real-time, there’s no need to wait until the end of the month to access expense reports.
So, if any suspicious activity arises, your accounting team can be notified and take action immediately.
Remember to analyze expenses
Although it’s important to control spending, there would be no use if expenses weren’t being analyzed – this is key to understanding all spending behaviors.
Rather than completing it all manually, this is automated using spend management software, reducing the risk of human error.
Not only this, but it can detect fraud more easily and track spending patterns to understand overall employee spending.
This not only helps to cut costs on company expenses, but holds each employee accountable for their spending and potential overspending.
Create a corporate card policy
To take your corporate spend even further, it’s a good idea to create a corporate card policy to fit the specific needs of your business.
Here are a few tips to create the perfect policy:
- Define spend categories
By dividing each type of spend into categories, you can ensure that they’re more specific for your company.
Accounting for categories ranging from travel to team events can help with a clear overview of what’s being spent and where.
- Set out roles
It’s also important to have a role system to identify who is responsible for making payments and approving them.
This allows for accountability across your whole company, especially if these roles aren’t being properly fulfilled.
- Handling out-of-policy expenses
It’s important to finalize a policy, but it’s also key to account for exceptions, which can include out-of-policy expenses, so it’s vital to plan for when this might happen.
This can be done through a general principle that can be approved outside of the spend policy, meaning there has to be a sense of trust within your team.
Gaining this trust will also help with better collaboration overall, and a policy for exceptions is the perfect guideline to help employees make informed decisions.
It’s evident that taking your corporate spend to the next level can be done accurately with spend management software.
These tips help to manage expenses with a clear oversight, which in turn cuts down on overspending – saving money for your business, whilst ensuring it runs as efficiently as possible.