How to avoid financial risks with good expense management

Processing business expenses is a part of every financial department's daily tasks. Those expenses can be travel costs, hotel stays and work-related payments. But if declarations get submitted too late or without all the information, you can easily lose control of your finances. This leads to mistakes in record-keeping, unexpected costs and compliance risks.

In this blog, you will read which risks you run when you don't have clear expense management. We will also explain how you can decrease risks with business credit cards and an expense management solution.

What clear expense management does for your company

If you have a good understanding of your company's business expenses, you have a better grip on your budget. You can step in sooner if expenses go up and make financial decisions based on your most recent numbers. You will also avoid duplicate or incorrect declarations.

Registering your expenses properly results in better accountability, both internally towards management and externally with audits or tax checks. If there are any questions, the financial department can easily show what the company has spent money on.

The 3 biggest risks of unclear expense management

Losing control of your company's expense management increases risks immediately. Here are 3 common issues.

1. Inefficiency and mistakes

Many companies still do their declarations manually. Employees keep receipts, send in expenses late and lose information. This causes delays, creates the need for extra checks from the financial team and there is a bigger chance of not noticing mistakes. What mistakes? Think of duplicate declarations, incorrectly processed VAT, wrongly recorded expenses or missing invoice numbers.

2. Not following laws and regulations

If you don't register your business expenses properly, it will become more difficult to follow the laws and regulations. Tax requirements or internal audits need up-to-date financial records, such as VAT declarations or tax checks.

Your company can also be fined if the details are incomplete or incorrect. For example, if VAT declarations aren't correct or if expenses haven't been properly registered. Clients' and partners' trust can also decrease if your company's financial records are not in order.

3. Business expenses not being available on time

Sending in declarations days or weeks later can make it difficult to keep up to date with your financial records. The financial team doesn't know how much has been spent and cannot take measures on time. This results in unpleasant surprises at the end of the month, such as forgotten expenses or going over budget. This in turn creates extra pressure on the financial department, who needs to go through and fix the issues later.

How business credit cards and expense management decrease risks

Business credit cards and an expense management solution make sure you always have a good understanding of your company expenses. This means that your financial team no longer has to wait on manual declarations. The transactions are automatically visible for the employee, as well as for the financial team. This saves time and prevents mistakes.

Sending in declarations is also easier for employees. They easily connect transactions to the correct expense in the app. No need to keep receipts anymore. This means there is less hassle and a lower chance of making mistakes.

What other benefits do business credit cards and expense management have? Here are more ways that they decrease risks in your company's expense management.

More control and transparency

With business credit cards, employees always know how much money they can still spend. The app shows their personal limit and how much of it they have spent. This way, there are no more surprises during work trips or when making business expenses.

The financial department also has a better grip on the finances. The employees' business expenses are neatly presented, making it clear at a glance how much everyone has spent. This in turn keeps your company's expense management under control.

Want to know more about how it works? Hortilux Schréder works with ICS business credit cards, connected with a declaration system. They are a company that makes lighting solutions for plant growth for international greenhouses. Without business credit cards, the company's financial department only had an idea of the expenses once the declarations were sent in. Now, they see them all immediately. This helps with planning and keeps them in control of expenses. Read more about them in the customer stories.

Easier compliance with laws and regulations

With a clear understanding of business expenses, you can register, approve and verify transactions more easily. This helps with internal checks and makes complying with laws and regulations simpler. You avoid discussions afterwards and are well-prepared for checks from the accountant or a supervisor, for example.

Fraud protection

Many business credit cards have good protections. For example, you can easily set the spending limit per employee. All transactions are also monitored constantly. Does a transaction look suspicious? The business credit card company will contact the Cardholder as soon as possible to prevent misuse and protect against fraudulent transactions.

More reliable financial reports

If business expenses are properly registered, making monthly reports is much easier. You can see what money is being spent on at a glance. The financial department can compare costs, notice anything unusual and change things on time. You have a good grip on your company expenses, avoid costs going unnoticed and keep your company financially healthy.

Business credit cards and expense management offer many more benefits. In this blog, we list the 6 biggest benefits of a modern business declaration process.

Choose a reliable partner for safe and clear expense management

Want to make your expense management clear using business credit cards and an expense management solution? Choose a reliable partner. This way, you will know for sure that the change will go smoothly.

Keep these things in mind when choosing a business credit card company:

• Reputation and reliability: research the bank's reputation and reliability. How many clients does it have? Has the bank existed for a long time? Is it part of a larger bank?
• Security and fraud prevention: make sure the credit card provider offers strong security measures and fraud prevention to protect your company against unauthorised transactions.
• Insight into business expenses: a good provider offers clear reports, limits per employee and a clear view of the company's expenses.
• Linking with an expense management solution: choose a credit card that you can easily connect to declaration software. This will make your record keeping simpler.
• Service and support: is the customer service easily accessible? And would you get help quickly if something goes wrong?
• Flexibility and scalability: your company can change, so choose a flexible partner with whom you can easily get extra credit cards and change limits.

Make your company's expense management easy with ICS

Time to make your company's expense management easier. Avoid mistakes in record-keeping, get a grip on expenses and be well prepared for checks. With business credit cards and an expense management tool, you will be back in control.

ICS has been active in the business market for over 35 years and is part of ABN AMRO. ICS offers business credit cards and expense management to different companies, from small to large. Thousands of companies rely on our services.

Contact us for an informal talk and discover what ICS can do for your company.