Businesses must accurately control their corporate spend to hold each employee accountable while avoiding overspending.
It makes it easier to overview all types of spending categories, which is often a complex task.
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?
Virtual cards
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.
These days, finance managers or supervisors across the company can set up personalized limits and spending rules for many modern virtual cards.
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.
Taking into account categories that range from travel to team events can provide a clear overview of expenditures and their respective locations.
- Set out roles
It’s also important to have a role system to identify who is responsible for making payments and approving them.
This ensures accountability throughout your entire company, especially if your team is not properly fulfilling these roles.
- 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.
You can achieve this through a general principle that falls outside the spend policy, requiring your team to have a sense of trust.
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.
Spend management software can accurately take your corporate spend to the next level.
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.
