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Quick guide for Canadian manufacturers on crafting effective invoice and expense policies
By SPONSORED
Industry Operations Manufacturing Canadian manufacturers effective invoice employee expense expense policies Quick guide SAP Concur spend managementSponsored by SAP Concur
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Writing invoice and employee expense policies is relatively easy. Getting people to follow them is another story. And just because you cram in all the rules, regulations, and restrictions the senior exec team wants, it doesn’t guarantee anyone will understand your policies or even read them. Complicating matters are the sweeping changes to spending patterns, shifting remote and hybrid workforces, and evolving employee health and safety requirements over the past few years.
It’s probably no surprise then to hear that nearly 9 in 101 executives say finding new ways to increase speed and flexibility in the management of travel, expense, and invoice is critical for their organizations to stay profitable and continue to grow.
With all of this in mind, it’s important to ask:
- Are our current policies flexible enough to meet ever-changing governmental requirements and fast-moving health restrictions?
- Do they adequately address business traveller safety and wellness?
- How about sustainability – is that even in our current plan (because it’s increasingly on the minds of many Canadian employees)?
Regardless of your answers, we recommend taking the following four steps to gain better visibility into your organization’s spend, find new efficiencies, and avoid a larger overhaul down the road.
Step 1: Update your expense categories
While “Other” (also known as “Miscellaneous”) has always been the largest spending category, the past few years saw the addition of new line items, such as work-from-home expenses, accounting for more than 60% of spend in industries like manufacturing.2
Re-examining your expense categories and aligning them with how your employees are now spending can help uncover hidden dollars that can be saved or reallocated to strategic initiatives, such as employee retention and recruitment.
Questions to ask:
- Do our existing categories still make sense?
- Are there new categories that should be considered to align better with the way our employees are spending?
- Could spending categorized as “Other” or “Miscellaneous” be reallocated to a new or existing category?
Step 2: Revisit your expense and invoice policies
Here’s an unfortunate statistic. From 2020 to 2021, policy violations for excessive personal expenses were up a staggering 21.8%.3 Even without bad intent, policies have a way of stretching and bending when undefined circumstances arise. And due to changes in how and where people work and initiate business spending, now is a good time to review your policy and make sure everything is up to date.
Questions to ask:
- Do our policies reflect the way we do business today?
- How much do our policies leave up to personal interpretation?
When you do start the revision process, keep in mind these best practices:
- Use simple, clear language.
- Be succinct (fewer than 10 pages).
- Explain the “why” behind the policy.
- Be consistent in tone.
- Regularly update with new types of spend.
- Consider global legal requirements.
- Review your training practices.
- Keep in mind your industry and corporate culture as well as your employee headcount and generational makeup.
Step 3: Empower your people
Your employees want to make the right spending decisions, but they don’t want to fight disconnected processes and inadequate tools to stay in compliance with outdated or unclear policies. Unfortunately, only 36% of employees say their organizations provide them with the right training and tools to keep up with changing policies and regulations.4
Once you set the right policies, it becomes easy for your employees to take the right actions. When you invest in people-first policies, processes, and tools, your employees, your bottom line, and your vendors will thank you.
Questions to ask:
- How do our employees feel about our T&E and invoice tools and policies?
- Are there simple changes we can make to increase employee satisfaction and retention?
Step 4: Consider expense, travel, and invoice management automation
When the act of buying something for work frustrates employees, how can they be expected to do the right thing? When audits and approvals are infuriating for finance, how can they keep costs under control? When policies and protocols confuse your teams and disjointed workflows get in the way, how can you possibly maintain compliance?
By digitizing manual processes, leveraging the power of AI and machine learning, and bringing data integration into the mix, your operations can run smoother and better, with the visibility and analytics you need in one place.
Questions to ask:
- Do our employees struggle to capture and submit expenses that are compliant with spending policies?
- Does our AP team lose time to digitizing paper-based invoices, manually checking data accuracy, and double-checking whether the spend is allowed?
- Have we been hit with vendor late payment penalties, government fines, or even fraud?
Bonus Step 5: Build momentum for what’s next
Once you’ve re-assessed and revised your expense and invoice policies, it’s time to build even more momentum for your business. Discover how SAP Concur solutions can automate your spend management including policy compliance.
Get started today at https://www.concur.ca/manufacturing
1(E)BrandConnect, 2021, “Ready, Reset, Grow”
2SAP Concur customer data.
3SAP Concur and Oversight, “2021 Spend Insights Report: A better understanding of 2021 for a better view of 2022,” SAP Concur and Oversight, 2022.
4SAP Concur and Oxford Economics, “Empowering your people: How executives can jump-start the flexible workplace,” SAP Concur and Oxford Economics, March 3, 2022.