Global expense management for multinational business
The era of globalization has given us a world that is more connected than ever. For the business world, in particular, geographical boundaries now exist mostly on maps and currency conversion bills. This development is best exemplified by the rise of multinational, global corporations operating across the globe with multiple operating units.
Operating globally might sound like a lucrative status for any business, and it is, but it does also come with its own set of obstacles. Global business expense management is one such aspect of multinational business that presents a significant challenge for finance departments across the world.
Global corporations are quite susceptible to policy violations. The need to work with multiple currencies, location-specific protocols, different accounting systems, piles of employee expense reports, etc. can make it difficult for your employees to follow company policies accurately. Recurring policy violations can result in repeated non-compliance which in turn can tarnish a company’s global reputation.
Analytical information and actionable insights on company performance are a necessary part of planning the future of your company. Gathering the data and charting it out to display necessary analytics and insights is easier said than done, especially when you have a truckload of data flowing in from different parts of the world. Not only is it time-consuming and labor-intensive but there’s always the scope of misrepresenting data.
Managing the expense of a company with one unit is already quite a complicated and time-consuming task. Imagine what it must be like to go through the same cumbersome systems in multiple locations working with a host of different currencies, employees, vendors, etc. Finance teams have to constantly keep track of multiple dashboards, follow up with different departments working on various timelines and go through all the steps that single-unit organizations have to follow, but in multiple different geographical contexts.
It’s very easy to suffer data loss, corruption, or mismanagement in global expense management, especially when you’re doing it with spreadsheets, pen-paper, i.e. manually. Manual approaches to expense management are notorious for being highly susceptible to errors and data mismanagement. Employees often tend to make mistakes, lose out on key information and run around to collate data, not because of a lack of competency but simply because of the sheer amount of effort required to manage expenses manually.
Ever caught your finance teams running after gatekeepers to get expenses approved? Have you had transactions delayed because they weren’t approved on time or were rejected erroneously? If your answer is yes, you’re not alone. Companies across the world struggle with approval systems and therefore often establish expense approval workflows. Why does your company need an expense approval workflow and how can it help? Let’s find out:
By designing an airtight expense approval workflow or getting an expense approval software onboard you can help cut out inefficiencies by reducing the workload on your finance team. Approval workflows establish gatekeepers for each approval level, send out reminders automatically and eradicate the need to run behind individuals. It also helps reduce the amount of admin work and unnecessary steps involved in approval systems.
As we’ve already observed, global business expense management comes with a big risk of errors given the sheer scale at which operations function. By establishing an expense approval workflow that accurately directs expense claims and automates sub-approvals, notifications, etc. you can reduce the number of errors faced in the expense tracking process. Instead of using multiple dashboards, managers can focus on one unified platform and track all expenses from there.
Not all expense claims go through the same approval process. There will always be unique claims, recurring expenses, high-cost expenses, etc. that will require a certain degree of attention. Instead of individually vetting such transactions you can build custom approvals into your approval policy. Custom approvals can help cut down the effort and time required by automating most of the steps necessary for unique expense claims.
Another benefit of establishing an expense approval workflow is that it helps you maintain constant visibility over expense claims and approvals. This way you can cut out incorrectly approved expenses or any other policy violations at their source. Volopay's expense management software with built-in approval workflows can immediately identify and subsequently notify you the moment there’s an occurrence of policy violations.
Approval workflows ensure that no expense goes approved without it being checked by a set of parameters first. In case there is an expense claim that appears to be dubious these systems immediately flag that transaction, freeze it and notify you of the same. This ensures that fraudulent expenses are curbed before they can creep into your books.
Reimbursable expenses tend to differ not only across companies but across geographies as well. Make sure your expense policy clearly states what types and categories of expenses are reimbursable or not and where. It should also contain directions about taxables, reimbursement timeline, documents required, and steps to follow for each country your company operates in.
An expense policy that your employees don’t understand is never going to be followed and is always going to have a low compliance rate. Clarity and accessibility are two extremely important notions that must guide your policy drafting process. The key is to keep it simple and easy to get so that your expense policy can be understood and, therefore, complied with by anybody and everybody.
T&E expenses make up a significant portion of expense claims made by employees. Therefore, it should be allotted its section in your expense policy. Your travel expense management should be guided by policies that clearly state details such as per diem rates, list of travel partners, vendors of choice, etc. for each country you operate in. While using the expense management platform try to pick which is customizable.
The reason why companies have different departments is that each serves its unique purpose. Not only does each department have its purpose but also its approach to delivering what’s expected of them. Your marketing team will obviously not work the same as your product development team and neither will the two have similar expense issues. This situation is particularly complex for companies operating in multiple locations.
In the absence of an expense policy that helps direct tax behavior, you run the risk of mistaken claims, losing out on rebates, and triggering unwanted audits. This is especially relevant for global expense management policies because different countries have their own set of tax laws and rules that companies are legally required to abide by. Make sure your policies clearly state all these regulations and enforce the same to avoid unnecessary risks.
With Volopay, the choice becomes simpler just get an all-in-one expense management platform. Not only does it make your finance teams’ lives easier, but it can also grow into a long-term asset.
On the Volopay dashboard, you can manage multiple currencies, transfer funds across wallets, create budgets and at the same time maintain real-time control over the expenses of all your departments and units operating across the globe.
In fact, Volopay works as an automated expense reporting system that tracks all expenditures and related particulars of all your company entities, no matter where they are. The platform also comes equipped with a state-of-the-art expense approval workflow that is completely customizable.
With Volopay, employee expense management gets simpler than you can imagine in your wildest dreams. Get real-time employee expense reports, enjoy automated corporate expense management and so much more.