In the world of small businesses and startups, financial management is very important. Business owners need to constantly oversee all their business expenses to make sure cash flow is maintained.
One significant outlay for many small and large businesses is employee expenses. Unfortunately, this can also be an area with a visibility gap, and it can be difficult to get the necessary insight to make sure this part of the business is managed cost-effectively. And with the recent wave of new entrepreneurs and freelancers, this affects all types of businesses when balancing budgets in their business bank account - especially come tax time where a small difference goes a long way.
The importance of employee expense tracking for small businesses cannot be overstated. Every penny counts in the small business world, and knowing where each one goes can mean the difference between success and failure. By tracking expenses, small businesses can better understand their financial situation, leading to better decision-making and increased profitability.
Issues with employee expenses
For small business owners, employee expenses can be a tricky area. Two key issues that can crop up are accurately tracking expenses and making sure they’re submitted in time. And the cause of both these issues? Having to process expenses manually.
Not only do manually generated expenses create extra work for employees, but accounting teams gain an additional administration burden due to having to manually certify employee expenses to make sure the submissions are valid. As well as that, the organisation also needs to determine the expenses comply with any expense policies that are in place. This could often be pushed down to a team's management level in a larger company or fall directly with the accounting personnel in a smaller business. Either way, somebody will be responsible for the administration.
Compiling receipts can also be problematic. In many cases, when using manual templates, either someone in the accounts team or even the employee themselves will have to manually scan receipts for bookkeeping, filing tax deductions or tax returns. This additional administration is time-consuming and takes employees away from other important tasks in the business - often the jobs they were initially employed to carry out!
With a manual expense process, keeping track of fraudulent claims or expenses that are out of policy is also much more challenging. Every line item needs to be double-checked and reviewed.
But it isn’t all doom and gloom, and the good news is that expense processing doesn't have to be like this.
How third-party expense tracking software can help
Tracking employee expenses involves the process of recording, categorising, monitoring and ultimately assessing the costs involved in running a business. It provides a clear picture of where the company's money is going, enabling effective budgeting and better financial decision-making. Small businesses run the risk of overspending without a proper expense tracking system, which can impact cash flow and profitability.
Keeping tabs on money going in and out of a business can be daunting. However, this process has been simplified with the advent of technology and the use of expense management solutions.
Whether you’re a small business with 10-100 people or self-employed with a dedicated expense solution in place, it becomes much simpler to keep track of what’s going on in the organisation and to identify issues - often before they even become a problem.
For example, one type of expense that can be difficult to keep track of is business mileage, as historically each journey made would need to be tracked manually. However, today many expense tracking solutions often have the functionality for mileage tracking. Using modern business expense tracking apps employees can now track mileage easily and automatically and accuracy is also increased.
Combining Amex GBT Egencia and third-party expense tracking solutions
One of the biggest expense categories that can be difficult to keep on top of is travel expenses. This is where Amex GBT Egencia can help.
Our platform can be a useful tool to work alongside an expense tracking solution as it can be used to book travel and provide valuable insights and analytics. Our tools can generate reports that visualise travel spending patterns, helping you to identify travel cost trends and make informed decisions on your business needs.
The Amex GBT Egencia travel management platform also provides your business with the best process for transport - such as flights and rentals, along with great prices on hotels and accommodation. Travel risk management is also included, which helps you locate travellers when they are out on the road.
Traditionally, when employees had to conduct business away from the office, they may have needed to incur ad-hoc travel expenses on their personal or business credit cards. However, now using the Amex GBT Egencia mobile app some of this admin is taken care of. For example, our app allows travellers to book their travel needs directly via the app. This frees up time and reduces admin since there is no need to keep paper receipts or fill in Microsoft Excel expense claims for these types of expenses.
Understanding travel management in expense tracking
Travel is a significant expense for many businesses as these costs, whether airfares, accommodation, meals, or transport, can quickly add up. So, travel management plays an important role when it comes to the overall expense tracking needs of a small businesses.
As you already know, effective travel management involves planning, booking, and managing business travel in a way that maximises value and reduces costs. It involves negotiating deals with travel providers, setting and implementing travel policies, and tracking and reviewing travel expenses.
A key part of travel management is a system which tracks and manages these travel expenses. This can involve keeping detailed records of all travel-related expenditures, setting travel budgets, and using tools or software to monitor and assess these costs. This is why you’ll often find that travel management and expense management are discussed together. Expense tracking features like these also help businesses and employees by speeding up and automating the approval and reimbursement process.
Another brilliant benefit of a dedicated travel and expense solution is that money can often be saved through the preferential rates these tools offer - rates that would normally be harder for the small business to negotiate directly.
The role of Amex GBT Egencia alongside small business expense tracking solutions
Our centralised platform for booking travel makes it straightforward to compare prices and options and encourages compliance with travel policies. It also provides detailed reports and analytics on travel spending, helping businesses identify trends and areas for savings.
Furthermore, Amex GBT Egencia features an API which means you can integrate your data in a number of different ways. For example, you may wish to use the Amex GBT Egencia API to export the data into a third-party reporting and expense management solution where the data can then be used directly alongside other data sources such as your preferred accounting software solution.
Key features of our TMC solution
Here are some of the key features that our TMC solutions offer:
- Automation: Our intuitive travel solution helps streamline business finances and simplifies workflows through the use of automation.
- Reporting and analytics: Provide detailed travel expense reports and analytics on travel spending, helping businesses understand where their money is going and identify potential savings.
- Integration: Integrate with other business tools using our APIs. This means you’re not tied down to proprietary systems. You have the flexibility to use your data how you see fit and combine it to your preferred business systems.
- Mobile: Employees can use the Amex GBT Egencia mobile app on their Apple IOS and Android mobile devices, allowing them to streamline their travel. Travellers can view the trip itinerary, receipts, and book preferred travel options via the app directly.
Our TMC solutions can support your business, leading to better financial management and increased profitability. With Amex GBT Egencia, small businesses can easily manage their travel needs and improve their bottom line.