Keeping on top of expenses can be a big hassle when you’re just trying to get on with your work, especially if it’s grown into a big pile of unprocessed paperwork!

What is expense management?
Expense management is a systematic set of processes businesses use to record expenses, execute payments, and track their spend. This includes keeping tabs on purchases businesses make, like assets and inventory, as well as the expenses incurred by traveling employees. It also involves defining a spend policy, enforcing it, and finding ways to cut down spending.

In this post, we’ll walk you through the basic tips to help you manage your business expenses.

Understand the spend
It’s impossible to manage what you don’t understand, so the first step is to review your business expenses. By doing so you’ll form an accurate picture of what you’re spending and may well be able to prune back in some areas. Eliminate unnecessary spending might be in order, or perhaps switching suppliers would be a viable option. About every expense, ask yourself this: What value is this adding to my business? Use your answer to point the way to a course of action.

List your business expenses
The first step towards reaching total expense control in your company is to sit down and list them. This way, you will be able to get a general idea of the cash pouring out of your business. Think of all the different expense categories, gather receipts, and check bank account statements to fill in your expense list.

Learning how to track business expenses presupposes that you are familiar with the essential expenses’ categories.

Use technology to create your records
If you are a small business, this doesn’t have to involve purchasing an expensive software package – a simple excel spreadsheet of expenses can be enough. Whichever program/software you choose, be it an expense report template in excel or otherwise, digital records will make your expense management simpler and more efficient.

Lose the paper addiction
Ink, paper, waste. What can you move to the digital realm to share the same exact information in a better format? Show your work on a screen and maintain commonly asked-for material on your iPad or computer so that you can send information with ease, instead of constantly printing out the material for every meeting.

Expenses policy
The foundation for any effective expense management is an active and enforced expenses policy. A document that clearly and concisely sets out the basic instructions on:

• How to make a reimbursement claim
• What can be reimbursed
• Spend limits on reimbursable spend
• Follow the link for our full guide to creating an effective expense policy.

One problem with a traditional approach is properly communicating your policies with employees. A policy document tends to be glanced at once and then fades from memory.

When policies are changing over time – with revised limits and rates – it becomes a constant battle to ensure these rules are effectively communicated and followed.

Incentivise progress
To encourage behavioural change, add an extra layer of incentive by gamifying the process for your team. Squeeze those creative juices out and come up with fun ways to reward employees for positive behaviour, while also disincentivising carelessness. For example, keep a friendly scoreboard, and give out Starbucks vouchers as prizes for the employee whose expense reports required zero corrections (a miracle in itself).