Increased cost efficiency is one of the key cues that motivates businesses to shift to a completely remote work model. However, the aspiration for cost efficiency can turn economically nightmarish if remote teams are not kept in sync with the financial operations within the company.
Nonetheless, it can’t be denied that expense management can be challenging to streamline for remote teams due to lower active interaction. Common challenges include:
- Overspending due to misinformation or communication gaps.
- Failure to keep track of receipts and documentation for expenses incurred.
- Delays in submitting expense reports due to remote work environments.
- Difficulties in verifying the legitimacy of expenses claimed by remote employees.
- Lack of visibility into real-time spending and expense data
- Inconsistencies in expense reporting and categorization across remote teams.
- Risk of expense fraud or misuse due to lack of oversight.
- Difficulty in providing adequate training on expense management tools and processes.
- Breach of data security and privacy for sensitive expense information.
While the challenges may seem monumental, they do not substitute for reasons to neglect setting up expense management systems. In fact, modern expense management tools and technologies are quite efficient in dealing with the challenges listed above. Some solutions include:
1. Expense Management Software:
- The software would provide a centralized platform for tracking all expenses across the organization. This centralization ensures administrators have a comprehensive view of where business funds are being allocated.
- Access to expense management software can be provided virtually. This saves remote employees from delaying the upload of expense information.
- Access is typically secured through multi-factor authentication, which enhances data security. So, business owners need not worry about unauthorized entities breaching their sensitive records.
- Employees can directly log expenses into the system. This eliminates the need to relay information back and forth with finance teams, which may be susceptible to communication gaps.
- Administrators can allocate specific budgets for different projects within the software. This feature enables better control over spending and ensures resources are appropriately allocated to various initiatives.
- Expenses can be segregated and categorized by teams or types. This categorization allows for financial optimization by identifying areas of overspending or inefficiencies.
- Most expense management software solutions offer dedicated support teams to assist users. Remote employees can receive guidance and resolve any issues they encounter, regardless of their location.
2. Virtual corporate cards:
- Virtual cards are issued exclusively to authorized employees, such as team leaders or financial decision-makers. This controlled access limits the risk of misuse or fraud by ensuring that only trusted individuals can utilize company funds.
- Virtual cards can be instantly provided to employees and don’t require shipping. This seamless distribution is particularly advantageous for remote teams spread across different regions.
- Administrators can set expiration dates to ensure that the cards are only valid for the duration of the intended purpose, like a business trip.
- Companies can configure spending limits on virtual cards, preventing employees from exceeding designated budgets. This feature promotes financial discipline and helps prevent overspending.
- Virtual cards allow administrators to specify approved vendors or categories of expenses. This capability enables organizations to enforce expense policies and ensure funds are utilized only for authorized purposes.
- Virtual receipts can be tracked at any time to verify the legitimacy of the expenses.
3. Automated Reimbursement Systems:
- Even if a company distributes corporate cards, some payments may not go through due to technical glitches. In times like this, an employee would have to pay out of pocket, thus necessitating a reimbursement system.
- These systems automate the verification and storage of expense receipts, which facilitates tax optimization.
- Employees can access updates on the status of their claims. This eliminates the need for frequent follow-ups.
- Many automated solutions can be integrated with expense management software.
- Remote work can make it difficult to submit hard copies of the receipts, complicating verification. Advanced features like policy compliance checks, fraud detection, and comprehensive reporting capabilities can enhance security, which may be lacking in manual reimbursement processes. The business can have faith that all receipts submitted are legitimate, even when they don’t have access to a hard copy.
What more to know:
Despite the software or card provider providing a support team from their end, businesses should designate a point of contact who knows the technologies inside and out. This would be useful when assistance is required for very sensitive financial information.
Additionally, businesses should thoroughly research the software provider and run internal tests to assess the security.
Overall, while employing remote teams can uncover cost-cutting opportunities, they don’t exempt businesses from setting up expense management systems and policies.
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