Managing expense data can mean more than handling invoices. For larger organizations, expenses can also include managing card programs for travel or office supplies.
The amount of data coming in can become overwhelming. Especially if resources are tight and you’re dealing with staff shortages or budget constraints. When data is siloed among departments, it becomes even harder to get a clear picture of all expenses. Having fewer tools and less time needed to automate the process can make managing the expense data an even harder task.
To manage expenses, here are some tips for making the process easier.
As expenses increase and the number of employee cardholders grows, start leveraging technology where you can to replace manual expense review efforts. When you embrace technology with a more modern and efficient process, it will help you save time and resources without sacrificing the thoroughness or quality of your expense review.
Expense monitoring tools and or software can help you track expense data more closely each month. From there, you’ll have less manual work to do when it comes to organizing and categorizing expenses.
Modern tools and technology can also help you find red flags such as duplicate payments or non-compliant card spending quickly. Another easy way to leverage technology is to start uploading receipt data. Also, consider requiring employees to submit their receipts and expense reports digitally.
Reducing and eventually phasing out paper processes means less to organize and keep track of but still easy access when you need to refer back to certain data.
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Don’t Fall Behind on Monthly Expense Reviews
When resources are tight, it’s easy to fall behind on monthly expense reviews. Perhaps you’re dealing with staffing shortages or a heavy workload that’s requiring you to juggle priorities. Suddenly, the goal becomes just getting through the month rather than checking everything off the audit to-do list.
While this is understandable, it’s important not to get into the habit of falling behind on monthly expense reviews. This could lead to lost savings opportunities or even long-term card misuse or fraud.
For example, if you’re a tax-exempt organization and employees are not taking advantage of tax-exempt status when making purchases, this will slowly divert money away from the organization if left unchecked.
To avoid falling behind, consider breaking up tasks and setting realistic deadlines. Get everyone involved including the cardholder, reviewer, approver, finance manager, and other staff with a role to play. Plan to work in extra time to serve as a buffer if things do fall behind so it will be easier to catch up. This means if something your hard deadline is a Friday, make the soft deadline a Tuesday or Wednesday as an attempt to get things finished on-time.
If it helps, you can also consider reviewing a sampling of the expense data to lighten the load. Just be sure to rotate the sampling of expenses or cardholder data you review each month. That way, so new data points are being explored for more overall visibility.
Get a Detailed Policy
A detailed and updated card policy can make the process of managing expenses easier in so many ways. The same goes for your expense review process. It’s important that everyone in the organization is on the same page about the best practices and procedures to follow.
This means new and current cardholders should receive a policy explaining approved purchases, how to maintain compliance, expense limits, approved suppliers to use, and more.
Managing expense data for business travel will be less hectic when employees know how much to spend on certain purchases, which travel vendors to book with, and how to submit receipts.
While it may take some time, aim to update and add details to your policy at least once a year. You can even outsource cardholder training to a third-party so employees can receive interactive training on the policy details to ensure comprehension.
Don’t Trust Merchant Category Codes
Merchant category codes (MCCs) can be a convenient way to identify a vendor and track expenses to ensure compliance. However, some MCCs are outdated or may belong to several other merchants in that category.
There’s no guarantee that the vendor tied to the MCC is actually selling products and services related to that specific category code. If your company has a lot of shipping expenses, you’re probably familiar with the MCC number for businesses in this category. Still, it may not be the best idea to overlook this expense and assume it’s an approved purchase or supplier.
Feel free to start with MCCs, but use it as a tool to further examine purchases and uncover any red flags – especially if you find the business name and/or receipt data don’t really match the genre of the code. Card Integrity can help you give MCCs a closer look and access other levels of expense data by utilizing our high-level expense monitoring and reporting systems.
Take a New Perspective
Budget constraints are important, but this isn’t the only factor to focus on when managing expense data. If you’ve been looking at expenses from a budgetary point of view, try changing your perspective to also ensure that the reported purchases are also legitimate.
Catching unapproved or potentially fraudulent purchases can be just as crucial to the company’s goals such as maintaining the budget. Keep an eye out for policy violations, split transactions, unapproved gift card purchases, and other non-compliant purchases. Then, communicate with employees about how they can fix their errors and maintain compliance in the future.
Limited Resources Don’t Have to Limit Your Efficiency
Dealing with lack of time and resources can be challenging but Card Integrity is here to help. Card Integrity’s flagship expense monitoring service, DataWISE, reviews 100% of your data for more than 250 various behaviors and we offer customized data insights.
We operate as an extension of your team seeking to free up your time from gathering and sorting through expense data. Utilize our Invoice Review and Receipt Review services as well to help scale up your efforts without overextending your time and resources.