Business development ยท 4 September 2019

How to solve the most common business expense problems

Paying for expenses is an everyday reality for businesses and their employees. Whether they are covering travel costs to meet with clients, for picking up supplies or carrying out essential work on location, these payments can cause significant headaches for business owners of all shapes and sizes.

At Allstar, we recently spoke with?1,000 UK SMEs. One of the key findings that the study revealed was the growing pressure that business leaders were feeling over the handling of expenses.

A disproportionate number of hours are being spent by owners on managing expenses every week, which is lost time that could be better spent on growing the business or even improving their work/life balance.

The results also highlighted that, for many, dealing with paper receipts and out-of-date processes creates a huge admin burden and reduces productivity.

Three common issues for SMEs

There are three main headaches that businesses face with their employees:

1. Overspending

Many managers are concerned about employees spending more than they need to when away on business, due to the impact on a business?s cash flow and profit margin.

For workers that are spending too much on their expenses, it is essential that the business has a clear approach to expenditure. In doing so, it can better educate employees on suitable spending boundaries, safeguarding company finances.

Moreover, it can help ensure employees don?t feel left out of pocket when they come to submit their expenses.

2. Lost records

Mislaid receipts are a common issue for those that operate under the ?pay and reclaim? expenses system. Many workers worry about losing their bills and, with them, any prospect of being reimbursed in full.

Additionally, by not keeping and submitting receipts, businesses can be hampered or prevented from making an HMRC claim to get VAT refunded.

3. Overwhelming paperwork

Expense claim submission processes are often longwinded with a large paper trail, which means an expense build-up for both the employer and the employee.

Failure to simplify can create issues for the business around reduced productivity and poor efficiency. Further, it has the potential to lead to employees moving on to a better managed and even fairer workplace.

These problems serve to highlight how inefficient traditional expense management processes can be for businesses and workers alike, impacting on their workload and their productivity.

Simplifying the process

There are ways to streamline the expenses process for both the employees and the employer that take the hassle out of dealing with receipts, eliminating the need for employees to pay for expenses out of their own pockets.

By harnessing the power of the latest expense management technology, both business owners and team members can enjoy a streamlined expenses process that also ensures controls in place to empower employees to get on with business, making an immediate and positive impact to both.

Such solutions can go a long way towards helping business owners to avoid common expense management headaches, enabling employees to pay for expenses whenever they need to, without using their own money.

For the business, they can set spending restrictions to limit spending outside of company policy, while also offering an extra line of credit to help manage cash flow and deliver cost-savings for a wide range of business and vehicles expenses, from up to 10% savings on standard mileage rates, service, maintenance, repair including tyres and car washes to accommodation and subsistence costs too.

All these benefits go a long way to improving business efficiencies and keeping company expenses down…

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Thore Vestergaard is the MD of Commercial Cards at Allstar Business Solutions. Previously, in a career spanning 25 years in the payments industry, Thore served in senior positions with industry leaders such as Mastercard, Citi and Visa. His focus has been on B2B payments, helping businesses modernise replacing inefficient payment methods with innovative, electronic alternatives. Innovation is also at the heart of his role at Allstar Business Solutions where he is on a quest to deliver more value to customers, be it SMEs or large corporates alike, through unique payment solutions that drive convenience, cost savings, greater transparency and better controls.

HR & Employment