More and more workplaces are encouraging remote or hybrid work, which adds flexibility and allows access to global talent.
However, with new settings, HR teams are required to handle a new set of financial hurdles too.
Handling remote team expense management isn’t limited to tracking the receipts but also ensuring compliance with the policy, transparency, and boost employee satisfaction.
To handle the challenges with effective solutions, here is what you should know.
Table of Contents:
Key Importance of Having Expense Management for Remote Teams
Expense management is a cornerstone of an organization for operational efficiency and better transparency for remote teams.
Having an effective expense management is crucial because of:
- Provide Financial Accuracy: Real-time tracking and reporting help in reducing errors and preventing causes of overspending.
- Adds Transparency: Helps in providing clear records for building trust between the remote teams and the management to minimize disputes.
- Improve Satisfied Employees: Having a prompt reimbursement can help in providing clear remote work policies to contribute to a positive experience and satisfied employees.
Top 5 Challenges & Solutions for Managing Remote Work Expenses
Here are top 5 challenges and their solutions for you to understand:
1. Not Having a Centralized Visibility
Remote teams are required to submit their expenses using multiple channels, whether it’s spreadsheets, emails, or chat tools.
This causes scattered data, providing a lack of clarity for HRs to evaluate the patterns, audit reimbursement, and ensure its following policy.
Also, it causes inconsistent logs, leading to higher risks of errors and process delays impacting overall financial planning.
As per the report, having shortened approval times can reduce 40% and reduce the expense processing cost by 58%.
Here is what to follow:
- Having a unified process implemented for expense reporting using standardized formats can provide a centralized and consistent process regardless of department.
- Also, you can integrate report workflows with your existing expense reporting software for real-time summaries.
- Use digital expense tracking tools to have a centralized oversight such as logging expenses in real-time, categorizing spending, attaching receipts, and many more.
- Provide access based on the role requirements or qualifications for transparency.
2. Expense Policies Are Inconsistent or Unclear
Another challenge in virtual team finance is struggling with efficiency-centric expense policies or handling the interpretation of outdated ones.
Providing a clear understanding of what’s qualified for reimbursable expenses may differ among teams and their requirements.
Also, it causes friction and confusion that may trigger inconsistencies and bigger risks.
Here is what to follow:
- Make sure all documents are tailored for remote work expenses, ensuring it has clarity on what’s allowed for reimbursement and expenses.
- Include the FAQ or visual template breakdown using examples of acceptable and unacceptable expenses.
- You can also use brief virtual sessions to update either quarterly or periodically to follow the policy change.
3. Delays In Processing Due To Manual Reimbursements
The manual expense also requires following a process like endless email chains, PDF receipts, or spreadsheets, either submitted late or not properly categorized.
It’s especially daunting if the process is manually done or has no streamlined workflow. This causes delays in processing and communication issues, causing remote employees to feel frustrated.
Here, having an automated process not only improves complaint accuracy but also reduces processing time by up to 42%.
Here is what to follow:
- Define clear submission protocols and fields such as date, category, business purpose, and receipts to make an easy part of onboarding.
- Instead of ad hoc processing, introduce the batch approach and review expenses on a weekly or bi-weekly basis to reduce the pressure and improve turnaround time.
- Set internal reminders to encourage timely submission and cut-off dates to reward the employees who follow the protocols.
- Consider using automation for digitizing the trail and a simple form-based system for centralized access and uploads.
4. Inconsistencies & Overspending in Budget
When teams or individuals exceed their spending limits, it can disrupt financial planning.
It gets especially hectic for remote or hybrid teams where HRs find it difficult to find the actual cause of the budget leak.
The lack of visibility and real-time reporting in managing distributed teams can lead to inconsistencies in budgeting.
Here is what to follow:
- Start by defining the pre-set limits based on roles and departments, including all the realistic needs for a remote team.
- Consider real-time tracking using shared dashboards to input and review monthly expenses.
- Conduct monthly or quarterly check-ins to assess trends and adjust the allowance based on actual data.
5. Fraudulent Claims & Risk of Inflated Expenses
Remote work made it difficult to verify whether the submitted expenses were legitimate or not.
Sometimes, the employee may end up submitting inflated bills or personal costs as work-related. Verifying the authenticity is crucial, however, it takes time and effort.
Also, HR is required to ensure fairness, but the lack of real-time visibility makes the process much more difficult.
Here is what to follow:
- Set the mandate for detailed descriptions and digital receipts for employees before they claim their expenses.
- For reviewing higher-value items, you do a manual review, but for monthly thresholds, consider auto-approved claims.
- Help your employees to have a clear idea of what happens if they misuse or violate the policy.
Tips to Improve Your Remote Team’s Expense Management
To improve your expense management for the remote team, here are some of the tips to follow:
- Use consistent labeling for standardized categories to analyze the trends across the remote teams and given time periods.
- Educate your employees using video training or virtual walk-throughs on how to claim their expenses, use software, and follow the policy.
- Have trackable KPIs, such as policy complaint rate or average reimbursement time to optimize and review much better.
- Use tools that can protect the security and privacy of your employee data, including their bank details and transaction logs, to ensure compliance with laws.
- Define the deadlines for your remote teams to submit their expenses and approvals to prevent backlogs.
- Make sure you adopt the mobile-friendly tools for on-the-go reporting.
Conclusion
Managing a remote team and expense management can be a challenge for HR teams.
From requiring proactive solutions to providing clear policies, it requires addressing visibility, improving workflows, and better employee engagement.
Having expense reporting software not only reduces the hectic process but also fosters a transparent culture and smooth financial operations.
We at HROne provide you with an automated solution for streamlining your expense management and empowering your organization regardless of where your team is located. Try HROne for free!