It Is Critical That You Track Your Employees Expenses

So what exactly is employee expense management? Well simply put it is whatever system that you use to record, process, and pay the expenses of an employee during a set period of time. You would also use this system to audit an employee so that if unauthorized expenses were to occur they can be dealt with. It is an unfortunate situation when someone takes advantage of the trust that you have given them by abusing the tools that they are given them to help them better perform their jobs. But it does happen and often.

Now depending on the size of the business and the number of employees that have to be issued things like expense accounts, credit cards, gas cards, and cell phones you may or may not need something like an advanced software program. If it’s only a couple of employees then your accountant can handle quick monthly reviews. Or you can do it yourself. But you should have something that you can use to keep track of their expenditures on a monthly basis. Based on your past experience with them and others you should have some idea of how much is regularly spent.

One area often abused is cell phones. Almost everyone has a cell phone nowadays. So you as the business owner purchase an appropriate plan for your employee to use the phone during business hours. Yes sometimes they will need to take business calls at odd hours. But after a couple of months they should have some kind of track record. When you see that phone bill are you checking their used minutes? Do they make a lot of long distance calls when there should be none? Are they regularly exceeding their minutes regularly? If they are you should give them a chance to explain of course but after that something might be up.

If you have some sales representatives that are constantly on the road do you issue them gas cards? If you do can you be sure that they are using them strictly for work? Often you can tell based on when they are used. Do you see some large weekend expenses? Maybe they used it to take a trip? These are the kinds of things that you need to be on the lookout for. Because it does happen whether we want to believe it or not.

Whatever kind of credit you give them access to needs to be double checked regularly if you want to prevent abuse. That is why it is so important to establish a regular reporting system. Besides the fact that if they do have an out of pocket expense they would probably like to be reimbursed for it. They need to keep all sales receipts so that they can be turned in. If your employees know you are tracking everything then they will be less likely to try something they shouldn’t. And that will save both you and them from a situation neither of you really want.

Cash Miller is the Editor of SmallBusinessDelivered.com and hosts his own blog at www.SmallBusinessDelivered.com/cash-millers-blog.