Most timesheet software packages now offer expense management functionality as standard.  Like the timesheet functionality, the expense management process should be simple and straight forward for the end user in order to promote ease of use and compliance.

Unlike timesheets, expense management systems tend to manage themselves on the basis that if a user does not enter his/her expense claims they will not get paid.  However, to ensure expenses are entered in a timely fashion allowing managers to understand the impact on projects, we recommend that your expense management software provide the following features:

• Simple easy to use expense entry interface
• Ability to create and print expense claims
• Provide users with clear visibility into the status of their expense claims
• Facilitates line manager and/or project based expense approvals
• Claim authorisation and payment
• Comprehensive management reporting
• Multi-currency support
• Categorise expenses, e.g. out of pocket & credit card expenses
• Enter lump sum or unit based expenses (mileage)

A key to the success of your expense management system is to ensure that you maximise the usage of the data.  All too often your supplier will simply set up the system and off you go.  A key part of the relationship is to ensure that you receive a return on your investment.  Areas in which will feel organisations can instantly see a return include:

Reclaim VAT on the petrol element of the mileage rate

In our experience many UK companies are not aware that the VAT petrol element of the “mileage rate” can be reclaimed.  For many organisations this alone can provide an instant return on your investment.  By accurately recording your business mileage not only can you easily extract the VAT element, you also have a full audit trail. Each employee travelling 20,000 per annum equates to £330 in reclaimable VAT for a potential £60 investment (Based on Inland Revenue recommended Mileage Rates).

At Atlantic Global, through our own software we have claimed back over £13,000 in VAT on petrol for 25 staff claiming a “mileage rate” for business travel

Accurately Re-charging Expenses to your Customers

Often, it is the miss-timing of entering expenses that result in expenses not being recharged to customers. A key element to any expense management solution is that it ensures expenses are captured in an accurate and timely fashion, allowing you to reduce billing cycles, increase cash flow and improve profitability.  For many organisations with primitive expense management processes, delays in the expense entry, approval and authorisation process mean that expenses are not recharged to the customer and your organisation is left bearing the cost.

In the most extreme case, we have seen organisations missing out on revenue in excess of £1.4m per annum, by not having a mechanism in place to pass this cost onto the client.  In another example, one of our customers managed to reduce expense costs by £500 per employee per annum, by accurately passing expense costs on to the client.  Measured across 1,000 employees this provided a significant return on investment.

Eradicate unnecessary or avoidable expense

Earlier we discussed how integrating your expense management system with your project planning and resource scheduling software can aid compliance.  It also provides significant advantages when analysing expenditure.  For example, resource scheduling can help you avoid unnecessary trips by using location as a key part of the resource selection process.  Avoiding one costly train ticket or flight through better resource selection will instantly pay for the software and provide a positive return on investment.

As well as these common areas where organisations can usually gain quick wins, a well configured expense management system will provide the following benefits:

• Recover VAT on all expenses
• Real time analysis of expenditure by client, project, resource and expense type
• Pass expense costs on to clients in a timely fashion
• Reduce Billing cycles
• Help employees complete Tax Returns

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