TECHNOLOGY INSIGHT
Giving your financial processes a spring clean Adam Reynolds, chief executive officer of webexpenses, explains why the end and start of a financial year is a great opportunity
F or payroll professionals, the end of a financial year can feel like crossing the finishing line of a marathon. But, as you gasp for breath, you realise you now have to do it all over again. That’s what makes the brief pause between finishing one financial year and the start of another so important. It’s a chance to carry out something of a financial spring clean; to review the processes that worked and fix those that didn’t. The decisions you make during this crucial period determine how well your organisation is able to manage the demands over the year ahead. So it’s really worth getting this right. And if you are having to recover from the strains of getting things tied off for financial year end, that’s one area you may want to review. Ideally, the end of a financial year should be no different to any other month. That’s the benefit of moving more processes over to ‘real-time’ accounting systems with tasks able to be handled as and when required rather than as monthly or annual floods of paperwork. It’s a change that all organisations that deal with pay as you earn have had to get to grips with in recent years, thanks to the switch by HM Revenue & Customs from annual to real time information reporting. It’s a change that has been enabled by the use of digital management systems which removes the organisational lag caused by traditional paper-based accountancy methods. One area where the benefits can be clearly seen is with the handling of employee expenses. The traditional way
things have worked is with employees collating a claim at the end of each month. For finance professionals, it means having to deal with a monthly surge of paperwork with crumpled receipts to decipher and each claim having to be manually processed. With a digital expense management system, employees are able to instantly convert any paper receipt they receive into a digital form. This means they can update their accounts as and when costs are incurred. ...enabled by the use of digital management systems which removes the organisational lag... For finance teams, it removes that monthly surge and provides much more accurate and up-to-date information on company cashflow. If your company is still using paper-based methods, the end of the financial year is an ideal time to switch. Another good ‘spring cleaning’ task made easy by a digital set-up is to review your expense categories. In the past, finance teams were liable to create as few categories as possible to reduce paperwork. It meant that any awkward costs that didn’t fit neatly into an existing category would often be bundled into an all-encompassing ‘sundry’ or ‘miscellaneous’ category. The
danger of this approach is that it creates a confusing muddle of different costs which become increasingly difficult to untangle. It raises the risk of errors and fraud, as well as ringing alarm bells for tax authorities. With digital systems, any number of categories can be easily created without the need for painful manual processes. It allows finance teams to easily manage however many categories are needed to accurately cover employee costs. It’s also worth looking at what changes could occur over the following twelve months that your department will need to deal with. One trend worth preparing for is the increased use of digital receipts. In the UK, Tesco is just the latest major retailer to put digital receipts on trial and it’s something Apple has been doing since 2005. For finance departments it presents the possibility of having to cope with a growing number of receipts in a multitude of formats. It’s a task which a digital expense management is future proofed to handle with a system such as webexpenses able to support just about any digital format. It allows an electronic receipt to be emailed directly to a user’s account – removing the need for any paper processes. So, by making sure your team has the right tools for the job and preparing for whatever challenges may come your way, your business should be fighting fit for the financial year ahead. With effective management and the move to real-time processes, we have the ability to make the work of payroll professionals more of a pleasant jog than a marathon slog. n
| Professional in Payroll, Pensions and Reward | April 2017 | Issue 29 42
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