Expense accounts are a common way of dealing with the often murky realm of employee payments and employer compensations. Rather than forcing employees to pay out of pocket and then hope that their employers pay them back soon, an expense account allows the employee to draw from a specific sum which replenishes after every trip or after each month or a year, depending on company policy.
Of course, having that money sitting there waiting to be used can be an awfully big temptation. Not every employee who earns the right to an expense account has the financial sense to avoid using it when possible, and there are very few people out there who can resist spending as much as possible on their accommodations once they know how much they can spend.
Fortunately, not only can modern expense account software help you keep an eye on your employees’ expenditures, it can also automate what gets approved and rejected, what gets only partially compensated and whether it’s by a flat rate or a percentage, and who has the right to access a certain amount in the expense account and what he or she can use it for.
For instance, if Bob is a salesman and Alice is a senior saleswoman, you might set your expense account software to give Bob a $500 discretionary budget for food and lodging for each of trips he goes on to court some of the less critical clients in the area, including a hard cap of $65 for each night’s stay. If Bob wants to sleep in a nicer hotel than that, he’ll need to pay the difference out of pocket.
However, Alice is in charge of keeping the big clients happy and hungry for your latest products, so she gets $1000 for each client so she can treat them to a good time. Incidentally, the settings in the expense account software allow her to spend up to $165 of your money on her hotel each night, partly because everything costs more in the big cities she visits and partly as a perk of seniority.
By using expense account software, you can monitor both Alice and Bob’s accounts at the same time, approve or disapprove of each line item individually or automatically, and get everything done in time to avoid repeated bad behaviours and avoid having rejected expenses build up too drastically. With an area for feedback, you can also hear your employees’ reason for charging the business account and you can make it perfectly clear where the line is on what is and isn’t a business expense.