Small and medium-sized enterprises (SMEs) face daily challenges in financial management, particularly with expense management. As your company grows and the number of employees increases, managing expenses becomes more complex, especially when done manually. Tasks such as collecting receipts, recording and reviewing every expense, and matching them with invoices can consume a significant portion of the workday.
This requires a considerable amount of time and effort from your financial team to get the job done!
Fortunately, today’s financial technology (FinTech) has simplified expense management and offers solutions that provide clear insights and near-complete control over your company’s spending in real-time. This article outlines the key challenges businesses face in managing expenses and how financial technology solutions have helped overcome these obstacles.
Challenge 1: Manual Expense Management Processes
Some may think that managing company expenses manually offers more flexibility and accuracy. However, it’s not just about knowing how much your company has spent this month or what remains.
Several obstacles come with manual management that can harm your business, such as:
- Human error: Manual processes are prone to mistakes, whether in data accuracy, forgetfulness, or the loss and damage of receipts. These issues aren’t a reflection of your employees’ professionalism but are inherent to manual processes. Such errors can lead to significant discrepancies in your financial records.
- Difficulty in tracking and control: Manual processes limit your real-time visibility into your company’s spending and how much has been spent to date. Additionally, your finance team needs extra time to review reports and compile data, as expenditures come from various sources and rely on outdated methods like waiting for paper receipts.
- Time consumption: Manual processes consume time in generating, updating reports, gathering receipts, and recording them, delaying more critical tasks that deserve attention.
Solution: Implement an Automated Expense Management System
To streamline expense management, your company needs a centralized platform that can:
- Track expenses in real-time as they occur.
- Approve or reject spending requests instantly, based on expense policy.
- Collect all receipts in one place, preventing loss or damage.
- Securely manage payment cards used for company expenses.
How the Nqoodlet Platform Simplifies Expense Management:
- Instant card issuance: Generate unlimited employee cards in multiple currencies (SAR, USD), recharge them directly through the platform, and start spending immediately.
- Global card acceptance: Use cards both locally and internationally with no hidden conversion fees.
- Detailed expense monitoring: Track spending for each employee using Nqoodlet cards, ensuring full visibility.
- Seamless approval process: Approve or reject spending requests and upload receipts in an organized manner for each employee’s transactions.
- Real-time expense tracking: Monitor all transactions with exact time and date stamps for full control.
The CEO of Nqoodlet, Mohamed Milyani, will discuss Companies’ Expense Management” during the Accounting Technologies Conference and Hackathon 2, As part of the upcoming SOCPA
He will dive into the critical role of effective expense management in shaping the future of your business.
Join us in Riyadh on Thursday, October 17, from 5:00 to 5:30 PM
Challenge 2: Employee Reimbursements
Reimbursement is the process where the company compensates employees for work-related expenses paid out of pocket, such as business trips, client meals, or transportation costs.
The reimbursement process typically involves several steps before employees receive their money:
- Submitting a detailed expense report with receipts, invoices, and sometimes a bank statement if the payment was made with a personal card.
- The finance team reviews the report to ensure all expenses comply with company policy.
- Approval of the reimbursement request.
- Receiving the funds, often after days or weeks.
Reimbursement challenges:
- For the company: Waiting for receipts and reviewing them can delay operations and cause lost opportunities.
- For the employee: Delayed reimbursements can affect employee financial status, and the lack of financial privacy may cause discomfort because the finance team might need personal bank statements, or the employee may not have sufficient funds for company expenses, leading to embarrassment.
Solution: Use Corporate Cards
With prepaid corporate cards, you can allocate company funds directly to employees responsible for expenses without handing out cash or making bank transfers to personal accounts. Employees can spend up to their allocated limit with a card fully controlled by the company, eliminating the need for out-of-pocket spending and reimbursement requests.
Nqoodlet’s Corporate Cards offer:
- Instant charging and spending control with no bank transfers or withdrawals.
- The ability to apply spending limits and track all expenses, ensuring compliance with company policies.
- Instant card deactivation with a single click, providing immediate protection of company funds.
Discover Nqoodlet’s corporate cards and how to get them!
Challenge 3: Unplanned Incidental Expenses
Most of your company’s expenses, such as subscription fees, business trips, and advertising campaigns, can be planned for since they have set schedules. However, unplanned incidental expenses often arise unexpectedly, such as car repairs, device maintenance, or additional transportation costs.
These expenses require monitoring and tracking, and managing them is often a challenging process، But can this type of expense cause issues for the financial management within your company? While they may not significantly impact your company in its early stages, over time, they can accumulate and affect your profitability if not effectively managed.
Solution: Integrate an expense policy with an efficient management system
Your company’s expense policy should clearly define what qualifies as incidental expenses, how they should be handled, and who is responsible for approving them. This makes tracking and controlling these expenses easier.
By integrating this policy with effective solutions like Nqoodlet’s expense tracking system and Corporate Cards, you can gain tight control over incidental expenses.
For instance, you can issue a dedicated card for these types of expenses and assign it to an employee who understands the company’s policy. The management can approve or reject transactions, making it easier to manage unexpected costs.
Ready to enhance your company’s financial operations? Contact us today to schedule a demo and discover how Nqoodlet can benefit your business.
