Nonprofit organizations are in a pickle when managing discretionary expense categories like travel, entertainment, and small-ticket procurement. On one hand, they generally have more complex accounting processes with sophisticated needs for tracking spend by projects, programs, and aligned to fund accounting. On the other hand, the enterprise-grade expense management software that can tackle these types of sophisticated needs is typically outside a nonprofit’s budget. As a result, many nonprofit organizations end up with sub-optimal software solutions that end up requiring manual accounting tasks and duct-taped workflows.
Here are three recommendations to modernize the expense process without breaking the bank:
Get visibility into what your organization is spending
Employee expenses are the number two driver of discretionary spending. While business travel remains low due to the pandemic, other categories of spend have tracked higher, including software, procurement, and work-from-home expenses. Employees and volunteers typically put these types of expenses on a credit card and get reimbursed after the month. While they are not large enough to go through formal procurement, they can add up.
The risk organizations face with employee-driven spend is going over budget. Even if you have a corporate card program, finance teams rarely have visibility into spend until expense reports come in, usually weeks later. It is challenging to know where you stand.
You cannot manage what you cannot see. Real-time expense management solutions help you track employee spending as it happens. No more waiting for expense reports, which means you can make quick decisions when needed.
Implement a corporate card program
Individuals who use personal cards for work often experience financial burdens, including interest, fees, and a lower credit score. Not only that, but your organization will not know what has been spent on personal cards until employees submit expense reports at the end of the month (see the previous point about visibility).
Who should receive a corporate card? It is up to your organization. It is recommended to issue cards to frequent spenders and travelers. You can also issue department cards and/or purchasing cards to cover more spend. Some organizations even issue cards to their “Super Volunteers.”
If you choose to distribute corporate cards, select one integrated with expense management software, which will give you more control over spend. You will get real-time visibility and can track spend, by department, by program, by project, or any other field that matters to you.
Streamline accounting processes
When you switch to a corporate credit card with built-in expense management software, you will reduce the manual work for your accounting team. There are several ways an expense management solution frees up your team for more strategic work:
No more credit card reconciliation. That might sound crazy, but if you leverage a connected card, your card transactions and expenses will always match up. This can save hours of work every month.
No more expense coding. This can be one of the most tedious and time-consuming aspects of the month-end close. Software learns from your behavior and auto-categorizes transactions immediately and accurately.
No more accruals. With real-time visibility into expenses, you know exactly what has been spent, so you can book actual amounts and skip the accrual steps.
Interested in hearing more recommendations to modernize expense management processes? Check out this webinar.
This is a guest post written by our partners at Center. Center offers expense management software that helps organizations save time and money. Here are some additional resources on expense management provided by Center: Ultimate Guide to Corporate Cards and Business Spender Sentiment Report.
Photo Credit: CardMapr.nl