Five Best Practices to Stop Wasteful Spending

List of best practices to stop wasteful spending

Stopping wasteful higher education spending sounds easy enough when controls are in place. The internal controls, such as policies addressing spend limits or prohibiting personal purchases, have a significant impact on the purchasing behavior of employees. But what if these controls are outdated, perhaps unverified, or worse, unknown? The outcome could leave the institution vulnerable to fraud and compliance issues, not to mention slowing down processes. To be more productive and to gain control of expenses, management and administration will need to take some practical steps to identify wasteful spending and to prevent further issues.

Wasteful spending takes many forms and easily hides in the spend data undetected, especially with poor expense tracking methods. Relying on manual processes to track thousands of monthly transactions is as effective as crawling in a marathon and expecting that you will still complete the race in record time. Luckily, the problem and solution to wasteful spending can be found in electronic monitoring and timely communication of expenses.

With a thorough review and timely communication of expenses, the controls that are designed to protect expenses have a greater likelihood of successfully eliminating unwanted spending. The following five best practices focus on how institutions can stop wasteful spending by creating operational efficiencies, gaining insights into expenses for strategic purchasing, and establishing a routine way to check for compliance.

Regular training on policies and procedures

When making purchases, sometimes a cardholder doesn’t know any better. That may seem hard to believe when your institution already has a written policy and one-on-one training for new cardholders. Clearly outlined policies, accessible resources on policy, and regular training will help new and existing cardholders to stay on track. Otherwise, if cardholders learn it and leave it the policy lessons will be quickly forgotten. To prevent your cardholders from having a case of forgetfulness and to encourage an efficient training program, apply these helpful training habits:

  • Keep your training updated with policy. If your policy is outdated take the time to update written policy and align your training to fit the current policy.
  • Stage cardholder training throughout the year, making sure each cardholder has regular training at least every two years.
  • Create online courses for regular training. In addition to one-on-one training for newcomers, the training process held online can alleviate the workload of continuous in-person training.
  • Make sure cardholders sign an agreement about your policies and procedures. A signed agreement shows their understanding of the rules as well as their adherence to them.
  • Have resources such as card policy, procedures, and agreements to sign easily available anywhere with online access.

Transitioning from manual to electronic expense monitoring

A manual expense review, especially for thousands of transactions per month, can slow down the review process and remain a barrier to seeing expense details that matter. When all expenses are monitored electronically, rather than scanned with slow, manually done effort, the quantity and quality of the check can dramatically increase. With the help of a third-party expense monitoring system, what takes full-time staff huge amounts of time with fewer results to review a fraction of transactions can be done in far less time and with less burden on existing resources.

Having a consistent, thorough review of expenses.

Remembering to begin a monthly review is not the issue for the administration. Completing the expense review each month and then doing it all over again the next month is the hard part. The heavy workload on administration, plus the daily demands and other priorities of their job, leaves very little time for completing expense reviews.  While reviews may not be core to their job role, employees and staff still need to complete them. Along with completing reviews, the integrity of the purchasing process depends on consistent, thorough reviews. To make for stronger controls and to stop wasteful spending, an expense monitoring system can ensure consistency in the review process and the completion of the review.

Aggregate spend from all the payment types and their systems

Bringing all types of payment methods together, including P-Card, T&E, Fuel Card, and other systems, management will have a greater opportunity for seeing the bigger picture of institution spend. Spend aggregation can also help identify areas of overspending and underused funds. By organizing the complex landscape of where spending occurs, the reporting on spend becomes the priority rather than the tracking of expenses.

Notify management and department heads of insights gained from expense reporting

After tracking expenses, the review team has greater visibility into identifying fraud and compliance issues or discovering new spend insights. Expense review is a powerful deterrent of wasteful spending, but the findings are only as good as the reporting of them. The next best step is to strategically communicate these findings to management and department heads. When reports are distributed with key findings and relevant insights to management and departments taking action becomes the next best step. With actionable insights, the expense review process now has an impact on changing cardholder purchasing behavior as well as boosting confidence in spending.

Take the Next Step

Just like in expense reviews, the next best step is to act on the listed best practices and to make improvements to your spending. With Card Integrity services, we have your expense monitoring needs covered and can help your institution to effectively communicate key findings and spend insights. For more information about our services, click below to find a solution that will work best for your purchasing goals and revolves around your policies and procedures.

Consistent, thorough review to stop wasteful spending.

Protect your university spending with Card Integrity solutions. Monitoring with an advanced monitoring tool and serviced by purchasing and financial professionals, Card Integrity solutions will help your institution to get the most out of every dollar. From training to expense monitoring and notifications on spend findings, every solution is built to bolster your policies and procedures and protect your spending.

Data-Wise Monitoring

A flagship service at Card Integrity, Data-Wise monitors 100% of your expenses, including P-Card, T&E, Fuel, and out-of-pocket expenses.

Receipt Review

Reviewing receipts doesn’t have to be a hassle or consume your workday. Card Integrity’s Receipt-Wise is a service that focuses on validating receipts to free up your time.

AP Review

Identifying duplicate spending across payment methods can challenge even the most tenacious review teams. With AP Review, Card Integrity can track potential duplicates and help you to find them across AP and P-Card as well as other payment methods.

Cardholder Training

Built online for ongoing awareness of your policies and procedures, Card Integrity’s Training-Wise helps universities to create, maintain, and report activity on cardholder training courses.

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