Choosing An Expense Management System
This guide has been produced by [email protected] as a product independent reference guide to assist organisations wishing to improve and streamline the management of employee expenses. The guide covers the key factors that organisations should consider when choosing an Expense Management Solution and provides details on best practices for managing employee expenses via Expense Management Software.
Why Change Processes?
Before you begin the process of changing your current expense management processes, the most important question that must be asked is “Why?”.
Typically, organisations we deal with choose to change their processes and implement an automated Expense Management System for 1 of 4 reasons:
Eliminate paper, improve workflow and eliminate the rekeying of data to the finance system.
Reduce expense costs through the enforcement of policy and improvements in supplier spend visibility.
Ensure that Company Policies, HMRC Guidelines and provisions of The Bribery Act are enforced.
Produce management reports detailing expenditure by Employee, Department, Project and other dimensions.
Automated or Manual?
The decision about whether to implement an automated system or to maintain and revise an existing manual process (paper or spreadsheets) typically comes down to cost and by extension the Return on Investment (ROI) that is being anticipated.
As a general rule, organisations with less than 5 claimants will find that a simple and properly managed spreadsheet or paper based system will be sufficient for their needs.
Organisations of this size are typically able to enforce policies and maintain control of the claims process manually. This is because approval authority generally rests with one or two individuals and the complexity and nature of the expense claims does not necessitate the enforcement, tax compliance and workflow rules that an automated solution will deliver.
For organisations with more than 5 claimants the benefits to be realised from implementing an Automated Expense Management Solution are compelling. Our solution, [email protected] is designed for organisations of between 5 and 5, 000 claimants.
In the next section we will review the criteria that these organisations should use when deciding which solution to implement.
Cloud or On Premise?
One of the first and most important questions that must be answered is whether to implement a Cloud or On Premise expense management solution.
Many government and financial sector organisations prefer the security and robustness of internally hosted solutions.
For smaller organisations, a cloud based solution may provide flexibility and eliminate infrastructure costs.
[email protected] is unique in that our systems can be implemented in either environment and can also be switched from one to the other in the event that organisational requirements change.
You can learn about our Cloud Expense Management Solutions here.
You can learn about our On Premise Expense Management Solutions here.
What Are Your Requirements?
Expense Management Solutions such as [email protected] have extensive and highly sophisticated functionality that enables organisations to manage their entire expense claims process.
Before selecting a preferred solution it is important to fully understand your specific requirements so that you can ensure there is a functional match and that the system is capable of achieving immediate goals and also adapting as the organisation grows.
The following questions should be discussed internally and with any potential supplier:
Software License Model
Do you want to purchase the software outright or rent/lease on a “per user per month basis”? The former is typically more cost effective beyond 24 months whilst the latter avoids upfront capital expenditure.
Will your users require specific software to be installed on their machines or will they access the system through a browser? In addition will users require access to the system via their mobile device.
It's important to understand that this question applies irrespective of whether you opt for a Hosted/Cloud solution or an internally managed system.
Will you require the system to be accessible from any location even if installed on your local network?
Additionally, how will remote access be managed? For example do your security procedures require connections over VPN, Terminal Services or Citrix.
Do you have employees in multiple locations (perhaps different legal entities) with different policies, tax treatment and language requirements?
This requirement is often overlooked by users and potential suppliers. For many organisations it is important to ensure that your chosen system can cater for diverse international organisational requirements.
Will employees incur expenses in multiple currencies and will employees in different locations require reimbursement in different base currencies?
Will your chosen solution be required to populate your finance (or other systems such as payroll) with expense transactions?
Do you recharge expenses to clients or internal departments? Will your employees be required to indicate this on their claim form or will you want a system that can manage this automatically?
Do you require a system that can manage VAT & P11D requirements? Can Staff and Client Entertainment policies be managed so that you capture the information you need in the event of a HMRC audit?
Do you have spend limits and category policies for Employee Expenses that your chosen system must manage?
Credit Card Imports
Can the chosen system import transactions from the leading Credit Card providers and present employees with an individual Credit Card Statement?
Do you require employees to record expenses against Projects, Jobs or other entities?
Do you want employees to attach electronic copies of their receipts to their claim?
Implementing Your System
Plan The System Design
Ensure that the system is easy for employees to use. As a general rule avoid long and complex forms.
Additionally make sure that the forms capture all necessary information for internal and external compliance.
Ensure that sufficient time is allocated to carry out end to end testing of the system.
Its important that ordinary end users are included as part of the testing team so that the system can be stress tested in a live environment.
Ensure that all interested parties, (Finance, IT, Compliance and End Users) are represented during the System Design Phase so that all viewpoints and requirements are taken into consideration.
Additionally, employees and management should be given plenty of notice about the go live date. Also ensure that the benefits of the new system are properly explained.