It’s now a total cliché, but 2020 has become a year of adjustment for everyone. Companies have downsized, synergized, and decentralized, just to keep business running semi-smoothly throughout this pandemic.
Just like everyone else, finance teams have had to make changes. But perhaps unlike sales and marketing teams - who’re used to working away from the office - accountants have found that some processes can’t just function as normal in a new environment.
That is, unless they already have processes that make “accounting from home” possible.
And luckily for us, we know a few who do. In this post, you’ll meet Spendesk’s in-house accountant Eva Tourki. She can operate from anywhere, safe in the knowledge that everything she needs is available with just an internet connection.
We’ll also take a look at a few other businesses who’ve set up their expenses and purchasing so that any new lockdown or work-from-home order won’t be too hard to handle.
But let’s start by setting out the typical accounting tasks, and why these might be a challenge from afar.
More for accountants
Typical accounting challenges - remote or not
Despite the best of intentions, accountants and finance teams are often surrounded by chaos. On top of your real responsibilities - chiefly closing the books and ensuring the company meets its tax obligations - you find yourself:
- Chasing after employees for their missing expense claims, receipts, invoices, and other documents you need to complete the bookkeeping.
- Following up with managers to check that they did indeed approve all of their teams’ spending.
- Hunting down information and data to put credit card purchases in context, and checking that the data itself is accurate.
- Watching out for fraud and human error, to make sure that nobody’s breaking the rules.
These challenges present a “glass half empty” way of looking at accounting. They suggest that you’re the bad cop trying to spot foul play.
But each of these challenges comes from the accountant’s main priorities, which are:
- Limiting risk with a system to double-check transactions. This might include tools that identify duplicate entries, or simply through diligent oversight.
- Ensuring expenses are valid, with a clear expense policy that’s easy to understand and follow. And then actually enforcing this policy.
- Tracking and enforcing set budgets, preferably with clear general ledger codes used by the whole team. And making sure that managers know and respect these, too.
- Creating actionable reports that tell you when issues arise, but also let you focus your attention elsewhere. Most importantly, you’ll have automated cash flow tracking, so you always know when money’s coming in and going out.
- Automating and digitizing the purchasing process, so that you don’t have to be the one making every single transaction. And when others make a purchase, you have all the information you need without going hunting.
From speaking with countless finance teams, we know that many can’t say they’ve achieved these five priorities. You may still rely on email or paper trails to document purchases, and we constantly hear how messy the company credit card can be.
But as we’ll see shortly, there are simple ways to overcome these hurdles. Mostly, it just takes more emphasis on these priorities, with the help of a little technology.
How to more easily control team expenses
The current focus on accounting from home - and its challenges - slightly overlooks one small fact: accounting from the office isn’t always as easy as it should be. We just saw those key issues above, and they apply whether you’re all on-site or not.
But those challenges are compounded for remote accountants. Suddenly you don’t have the same easy access to people and resources you’d normally have.
And likewise, your teammates can’t just wander in and ask simple questions. Which can certainly be annoying, but it’s better than dealing with bigger issues down the line.
Here’s the good news: the tactics we’re about to see just make sense no matter where you’re working from. So you can get up and running now while remote, and life will get even easier when you return to the office.
Set up modern processes to approve and track transactions
For many businesses, payments and expenses haven’t changed in decades. So what you might think is “modern” is really “1980s-modern” - and we’ve actually come a long way.
Your processes should include:
- A simple, clear, and intuitive expense policy. No 40-page documents, no legalese, and make it digital. Even better, build the policy into your payment methods, so team members follow it naturally. Speaking of which...
- Payment methods built for businesses. That means they should essentially do your expenses for you, and capture key documents along the way. (We’ll explore these in detail next.)
- Digital documentation. Receipts and invoices should be scanned and sent in (ideally with a mobile phone), submitted via a central expense tool rather than email or Slack. Accountants should never have to rifle through piles of receipts, organizing and filing them for the second or third time.
Again, your best friend here is technology - the main difference between today and the past. You can automate much of this and save time (and money) while actually making your work easier.
Use modern payment methods for business payments
Sensing a theme? Most likely, if you can’t easily work remotely as an accountant, it’s because you’re relying on outdated tools.
And here’s the real secret to efficient expense accountancy: when transactions are executed correctly, the hard work is already done. The tricky parts of the job are when you have phantom credit card payments, or expense claims missing crucial information.
But once you get off the company credit card, and give employees secure (tracked) ways to pay, you’ll have fewer unexplained purchases, and far fewer expense claims in general.
Today, businesses have five excellent ways to pay:
- Employee debit cards which work just like credit cards, but every payment has the employee’s name on it, and draws from the right budget. These have pre-defined limits and rules too.
- Single-use virtual cards to shop online, for one-off Amazon purchases (for example). Once the payment is made, the card is no longer valid.
- Recurring virtual cards, which also work online, but only at the same vendor for the same subscription.
- Digitized expense claims for rare instances when employees can’t use one of the above. They pay with their own money, then immediately log their purchase and receipt in an app. And you can even pay them back directly from the same app.
- Paperless invoices, to save on data entry. Team members just upload their supplier invoice, and the system pulls out all the important information.
The big win here is that other employees actually do most of the work for you. But the processes are actually more user-friendly for them, so it’s a win/win.
Remote bookkeeping examples: Spendesk, Botify, & Habito
Let’s take a quick look at three businesses doing remote spending right. And a crucial note: none of these are fully remote companies. Rather, they set up smart processes when things were “normal,” and have been able to operate smoothly whether in or out of lockdown.
How Spendesk’s accountants use Spendesk
Eva Tourki, Accountant, Spendesk
According to Eva, “Spendesk is our only tool to manage spending. I have my approval workflows built in, I can add and update general ledger codes, I have digital receipts and invoices, and I can close the books in a few clicks.”
“Since I joined Spendesk (and therefore started using the tools), I can:
- Clear my desk of all the receipts and expense claims I was used to sitting behind.
- Avoid issues with suppliers, because it only takes me half the time to pay their bills.
- Quickly check all our card payments in real time, rather than waiting for the long credit card bill - always full of mysteries.
- Half the time I spend on monthly closing, and think more about the value-adding tasks I prefer.
- Deal with expense claims and invoices in real time, rather than letting them build for months. I can quickly scan them and schedule payments as soon as I receive them, so I don’t have them hanging over my head.”
“And none of this is any different when doing the accounting from home. It’s all on my computer anyway - I don’t ever need paper.”
How Botify manages its global accounts
Géraldine E Adjadj
Botify previously used an accounting setup that will be familiar to many readers. It used the typical credit cards to make online purchases, and had external accountants to handle the books for each of its three offices.
But this changed when Géraldine came on board. “Ultimately, we didn’t have control over our books. Once or twice a month, they’d share information with us so we’d be able to consolidate all our numbers. We didn’t have the visibility we needed, and I couldn’t have information as soon as I needed it.”
Géraldine brought Spendesk to Botify, which gave it:
- “A traceable workflow and validation system. I can find details about any specific purchase any time I need them, which is so important.”
- “A system for validation and approval. When an employee takes a subscription online, their manager knows right away and needs to approve this purchase. This is really helpful, and it works very well.”
- “Freedom for our team members. This workflow is very easy and can be done from anywhere. It doesn’t slow our teams down at all - in fact they can spend more easily, but with more control than ever.”
- More control over spending. “We have to be the police within the company. We have to make sure that our clients pay us, that we pay our vendors on time, and that our spending stays within the defined budgets we created at the beginning of the year.”
Overall, this system makes sense for Géraldine because it’s easy for everyone else. And she can build her spend processes the way she wants them.
“I love that you offer different modules based on our specific needs. We don’t have to take the entire suite if we don’t want them - we simply choose the parts that we need. We’re in control of our Spendesk account, just the same as our spending.”
How Habito frees its finance team
Aaron Townsend, Financial Controller
Habito is itself a new and exciting tool - an online way to find and compare mortgage options for house-buyers. And because it has innovation in its DNA, the finance team is always trying new and interesting things.
“One of our goals as a finance team is automation. We’re trying to automate as much as possible, or to find much more efficient ways of dealing with the transactional things that finance teams like us do.”
Which of course means expenses. Since joining Spendesk, Habito has:
- More secure online spending. “Disposable virtual cards are great. And the subscription cards are really good from a visibility point of view. I always know which subscriptions are running, and can assign cards to different people when someone leaves.”
- Faster expense reimbursements. “People can get paid a lot sooner. If they have a big event and a lot of expenses, we can get money to them right away. We just press a button and it goes.”
- Fewer expense bottlenecks. “Normally you have to take the expense, export it, and upload it to the bank. That’s all eliminated. Once it’s approved, it’s done.”
- More focus for the finance team. “I honestly believe that I save a couple of days a month from not having to respond to queries about payments, spending, or who’s responsible for each cost.”
“It’s great for us, because it’s very light-touch for the finance function. We just set all the controls at the beginning, and we can leave them to it.”
“It’s the autonomy that it gives employees that really counts. We’re treating them like adults - they know how to use a card and how to spend. In that sense, we’re saving a few days every month because I don’t have to answer all of those questions. They have the power to spend - within the sensible limits we impose.”
Accounting from home: what’s different for remote bookkeepers?
Whether it’s full-time or as a result of new lockdowns, remote work is here to stay. And accountants can easily adjust to this fact, especially with the right processes in place.
As we’ve just seen, digital, automated, and decentralized expenses are better for everyone - from accountants to employees. And they make sense whether you’re at HQ or on the beach somewhere warm.
All of which makes now the perfect time to upgrade your expense account practices. A relatively easy transition now will have you and the company ready for whatever life throws your way in 2021.