Owning a small business is not a simple process of selling product and service only. As the business owner, we must take care of all the operation element that will affect from internal to external of the business. Especially when it comes to managing expenses, a small-medium enterprise is at a huge disadvantage to the larger companies. However, SME is lack of visibility into the nature of spending as well. If most of the spending does not manage wisely, the business will operate in an inefficient way, and it will ruin the planned budget.
Hence, we need to identify this four of the most common challenge on the expense management and come along with how to solve them.
Increase of the travel cost
In the 21st century, transportation is getting convenient for us across the country all over the world. However, according to the Global Business Travellers Association, travel cost has increased over the past decade. Hike of fuel price and the living cost of the country roots the rising cost of the airfare and hotels. In term to reduce the travel costs, your business must be plan well by limiting those trips that are necessary and important. Besides that, conduct a meeting that always comes with ultimate decision to prevent multiple times of travel that are less essential. In others words, you can conduct an online meeting or voice conference with some least important issue instead of travel all over abroad.
Problematic of receipt/ Lost receipt
A receipt is the useful proof and important for accounting to track back all of the expense. For those business travel expense, it’s important that receipt is real and comply with the company policies. Somehow, fraud might be happened by some dishonoured employee take advantage of these power tools to over-claims the expense. Apart from that, loss of receipt area also a problem for SME to proven the accurate expense. In terms to improve over, this first is to clarify the method of receipt submission. Company policies always have to state out the item which can be reimbursed and limit the amount that without approval from the higher authority. So, we can use the advantage of the information technology like mobile phone and mobile application to allow your employee to get immediate submission and approval too. This will reduce the chance of lost physical receipt and unauthorized spending.
Unauthorised business expenses
It is one of the challenging tasks to ensure that the business fund is being used only for authorized expenses. With the traditional methods, business owner have very limited control once the fund has reached an employee, and this always the roots for a lot of unnecessary and unauthorized expenditure. For example, an employee sometimes books their flight and hotels but upgrade to better seats or more expensive rooms without permission at a later date. It is hard to trace if only flight ticket price is reported. However, setup a spending limit on the cost reimbursement, even can limits where the prepaid card can be used – POS, online transactions, or ATM withdrawals.
Poor data visibility and accuracy
Most of the business owner reluctant to invest in expense management solution. Most of the owner try to simplify their expenses by simply build a spreadsheet, such method may work with some small transaction and a limited number of expenses. But once your transaction reaches certain size and amount, the spreadsheet method might limit its effectiveness. First, it’s required manual data entry, which might come into errors. Secondly, it’s time-consuming and leads to a potentially costly mistake.
If you are considering hiring professional accounting service for your business, AG Singapore is among the well-respected in this industrial. AG- Singapore provides one-stop solutions for your business. Give us a call today, and let’s start a conversation.
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