DRIVING SUCCESS 8 BEST PRACTICES FOR EASY EMPLOYEE EXPENSE TRACKING

DRIVING SUCCESS 8 BEST PRACTICES FOR EASY EMPLOYEE EXPENSE TRACKING

Introduction Maybe you re a project manager who needs to accurately capture employee expenses and allocate them to particular projects. Or you re an accounting manager who needs the same or similar expense data to ensure accurate, timely reimbursement. In either role you may face the same dilemma: If your organization still uses manual methods for tracking employee expenses, then slow, incomplete and inaccurate tracking is inevitable. Employees find manual expense tracking processes monotonous and difficult to follow. These are often spreadsheets or printed, hand-written time and expense sheets with reminders in notebooks or on sticky notes. As a manager, you may be forced to deal with erroneous submissions and make sure that everyone submits information on schedule, and approval paths are followed. That steals productive time from your day. Unfortunately, manual methods like these are still entrenched and managers in organizations everywhere deal with them every day. If that includes you, you re a good candidate for moving those processes off your desktops and onto the Web. But the means for doing that are decidedly not equal. Many companies have struggled with solutions that featured confusing interfaces; inadequate configurability; difficult integration with other applications; and maintenance headaches. you might minimize these somewhat by resorting to Excelbased spreadsheets for data capture. But that only eliminates transcription chores and some errors. There are still the slow and inefficient needs to deal with paper receipts, route expenses for approvals, export to other applications, and ensure accuracy. Best practice: Use a system in which all employee expense data is entered just once via web-based software, and used as needed for project costing, reimbursement, or other accounting. The less time that people spend dealing with expense-related data, the more efficient they become. All of those shortcomings can be avoided. In fact, with little or no conversion hassle and a remarkably short transition time, you can begin enjoying the productivity, cost, and convenience advantages of an online employee expense tracking system. This guide shows you what to look for in eight key areas, as you evaluate prospective solutions that could make your tracking easy. 1. Replace paper and Excel-based tracking with a specialized solution Your employees expenses don t have to be very numerous or complex before paper-based systems for tracking them become efficiency nightmares. Consider what this could mean in a medium-sized company with 1000 employees, 250 of whom travel or incur other expenses. Just to get a basic view of their expense data on a timely basis (before you tackle project allocation or reimbursement tasks), you d have to collect hundreds of pieces of paper, get them validated and approved by a dozen or more managers, and then transcribe the data. Such a system is rife with opportunity for errors, and the double-entry required is a significant time drain. Of course,

2. Make it easy to deal with ALL your expense types and tracking factors Unless your expense tracking needs are rudimentary, the list of features you ll need to make the process genuinely easy (also see #4 below) can be pretty extensive. It ll be unique to your environment but should include the ability to: Enter expenses in multiple currencies Track details such as expense type, payment method, tax codes, and currency exchange rates Upload digital receipts for immediate processing Create unlimited expense types according to your needs the past. That model is being overtaken web-based applications because the advantages are too great to ignore. You get much more than gains in billable productivity. You also get predictable operating cost and lower total cost of ownership. Your software becomes an operating cost rather than a capital expense. There s no need for new hardware or other IT infrastructure costs, and there s minimal implementation time just hours or days instead of weeks or months. A web-based system means there s nothing to maintain or upgrade: You always have the most recent version of software. And all your data is available from anywhere with an Internet connection. Best practice: Go with a web-based solution to ensure high productivity and low operating cost. Define custom tax codes to automatically calculate the appropriate taxes for each type of expense Manage exchange rates for accurate tracking and reimbursement Set expense estimates to account for additional costs such as travel, meals, etc. Track actual expenses incurred against the set estimate to make sure you stay on track Set up approval paths that include people at various levels Send email reminders to ensure approvers review expense sheets in a timely manner Of course, all of this functionality and more should be centralized so information about your employees expenses is available immediately and is updated in real-time as users enter their data. That way expenses can be processed and approved quickly, and can inform managers about the true costs of their projects. And over time, historical data is readily available to help you make more accurate forecasts. Best practice: Get expense tracking software with the breadth and flexibility you need to easily match your expense types and business processes. 3. Get a hosted solution for better efficiency and cost of ownership If you ve followed the trends toward cloud computing, Software-as-a-Service (SaaS) and web-based business systems, you know that the traditional way of running business applications on expensive, internal hardware that you monitor and maintain yourself is becoming a thing of

4. Get software that s easy for everyone to use While it s important for you as a project manager or business administrator to do your work easily, success with tracking relies on your employees adopting the software. And since accuracy depends on their entries, it s vital that they view it as requiring the least possible extra effort. That s a fundamental of best-of-breed tracking systems: It s extremely easy for employees to get in and out quickly. The best systems also simplify the review-andapproval process for supervisors, and eliminate the need for managers to track down tardy or incomplete expense submissions. A great expense tracking system causes its users to ask, Why didn t we do it this way before? requirements. Do you need up-to-the-minute expense data emailed to you on a regular schedule? Setting it up should be easy and obvious. Do you need to tailor the allowed expenses for each project? It should be a simple matter and a big time-saver to make it so by pointing-and-clicking. In short, using your employee expense tracking software should be easy and hassle-free. Best practice: Give your prospective system a thorough test drive. See whether you feel confident that you can do everything you need, intuitively. Best practice: Get employees involved in the assessment process for every system you re considering. They ll be a great barometer for the rate of adoption you can expect. And you should set that expectation high. When employees can enter and see their expenses quickly, their adoption rate and your data s accuracy rises dramatically. 5. Get software that makes your administration and reporting easy As we mentioned above, many companies have stumbled with project tracking software because it was hard to use. When you try a new system, its workflow and configurability should feel intuitive. It should even have built-in intelligence that anticipates what you need to get your work done. The best employee expense tracking software gives you a comprehensive set of functions such as highly flexible and easy-to-run, real-time reports and makes it easy to expand upon them by adding things that suit your

6. Integrate your data wherever you need it For most companies, capturing data in dedicated employee expense tracking software is only part of a total solution. Sharing that data with other applications completes thepicture. This can be critical for client billing, expense reimbursement, and other processes. The ideal is seamless exchange of data via an open API (application programming interface). Most web-based project tracking software includes out-of-the-box data sharing that is based on this. Typically this is supplied for applications such as Microsoft Project, QuickBooks, and others. If your company needs to integrate with other applications, investigate carefully what s required for that to happen. The best employee expense tracking software includes an API that facilitates data exchange via standards-based integration (such as XML web services). You should have the option of developing the integration yourself, or working with your software vendor to implement it. Best practice: Choose a solution that guarantees you ll get the data sharing integration you need. and antivirus protection; encryption of in-transit data; and offsite data backup with tested disaster recovery provisions. Also very important: Your vendor should have a service level guarantee for the availability of your data and the software you use. Best practice: Be sure that the vendors you consider can document their means for supplying all of the above. 8. Automate compliance with regulations If your organization performs work for government agencies, you may already be familiar with requirements for automated timekeeping. When you search for a webbased project tracking solution, it can be vital that the one you select supports the requirements you deal with. Government contractors are subject to audits of their employment practices and accounting, and within those, systems for tracking and billing must conform. DCAA (Defense Contract Audit Agency) compliance is a good example. To comply, your system must have, among other features, the capacity to limit access and report on users activities with the system; it must include proper setting of roles and permissions; it must support unique project and task names with discrete identifiers for each work item; and it must have the means for notifying workers electronically about certain details of the work they are assigned. Further, a verifiable audit trail process must be in place to collect all initial entries and subsequent changes. Best practice: Choose a vendor whose solution includes the built-in means to comply with the regulatory requirements your organization faces. The best employee expense tracking software makes it easy to share data with billing, payroll, and other applications. 7. Ensure that your data is safe, secure, and available When you choose a web-based project tracking solution, you pass the responsibility for safekeeping your data to a third party. It s extremely important that your vendor is equipped to ensure its security, integrity, and availability. This is accomplished via a combination of physical security and environmental controls; independent certification that adequate data protection processes are in place (the industry standard for this is SAS 70 Type II certification insist on it). Other considerations include firewalls

Conclusion To make dealing with employee expenses easy, you need a timely, accurate way for people to enter data and manage it intuitively. Traditional, manual methods for achieving this are yielding to online systems that make it easy for employees and managers alike to account for and view employee expenses. The best of these systems are easy to configure, readily share data with other applications, and provide low cost of ownership by offloading responsibility for hosting and security. Select one of these webbased systems and everyone involved with processing employee expenses will work easier. About Replicon Founded in 1996, Replicon, Inc. is the world leader in web-based time and expense management software. Replicon s flagship application, Web TimeSheet, provides professional service organizations with quantitative, real-time analysis of workforce productivity and a way to set employee productivity goals based on bottom line revenues. Replicon has more than 1.5 million users in 7,300 companies worldwide. For more information, please contact: Replicon Corporate Headquarters Suite 800, 910-7th Avenue SW Calgary, Alberta, Canada, T2P-3N8 U.S. Office 951 Mariners Island Blvd, Suite 130 San Mateo, CA 94404 Toll Free: North America 1-877-662-2519 Global +800 6622 5192 info@replicon.com www.replicon.com