When you’re an ESN, travel costs are inherent to the company’s activity. And in an inflationary environment where margins on assignments are shrinking, it is important to keep overheads under control and, more specifically, to manage professional expenses to ensure the profitability of each assignment. We take a look at the best practices for optimising expense management in ESN.
1. The challenges of managing expense accounts in ESNs
Before revealing our advice on how best to manage your consultants’ expense accounts, let’s take a look at the 3 biggest challenges you are likely to face on a daily basis :
- Diversity of assignments : depending on the level of presence of your ESN in the market, your consultants are likely to carry out their assignments in France, overseas or abroad. This diversity creates considerable complexity in the day-to-day management of expenses, with constant fluctuations in exchange rates, tax regulations and local requirements, as well as customer-specific rebilling agreements.
- Volume of expenses : by the very nature of your business, consultants have to make a large volume of expense claims: mileage allowances, transport costs, meal costs or accommodation costs in the case of “long trips”. As a result, processing this volume becomes a time-consuming task to the detriment of other, higher value-added activities.
- Compliance of expense claims : from the mission order to the expense claim, every item of data entered is part of the compliance process of your expense policy : name of the issuer, nature of the claim, types of expense, mission title, reason for the trip, charge… All these elements, not defined in advance and/or entered by hand, can be sources of error and involve your back office teams in lengthy re-checks, synonymous with wasted time.
2. An effective expense management policy for ESNs
Implementing a clear and effective expenditure policy that everyone is aware of not only helps to guarantee the company’s financial health, but also contributes to the day-to-day well-being of its employees. To achieve this, there are 3 steps to prepare and integrate :
Step 1: Set spending rules
The basis of any expense management policy is to define a ceiling for each type of expense incurred (transport, meals, accommodation), except that it will need to be refined according to the location of the mission. The limits may not be the same if the charges are made in the provinces, the Paris region or abroad. You will need to maintain a certain degree of consistency to ensure that the expenses incurred by your consultants are reimbursed as closely as possible to the local cost of living.
For example, you can set your meal and hotel ceilings by identifying 4 travel zones :
- Zone 0 (less than 30 km from home) meals only
- Zone 1 (provincial travel) + travel policy with and without overnight stays
- Zone 2 (travel in the Paris region) + travel policy with and without overnight stays
- Zone 3 (travelling abroad) + travel policy with overnight stays or furnished accommodation if the assignment lasts more than one month.
Step 2 : Define validation circuits
The second and by far the most important step in ensuring compliance is to define one or more validation circuits depending on the amounts involved. For example, you can define whether it is the consultant’s direct manager or the assignment manager who validates expenses, or at what budget level it is necessary to add a second validator. However, bear in mind that the more validators your circuits introduce, the longer reimbursement times will be, and this will have a direct impact on the day-to-day lives of your consultants.
Step 3 : Define repayment deadlines
By law, companies have up to 3 years to reimburse their employees’ expenses. Most companies do not apply this rule and refund within a more reasonable period of 30 days. Others choose to adopt a more flexible repayment policy, setting shorter repayment periods depending on the amounts involved. In all cases, your reimbursement deadlines must not lead to financial difficulties for your consultants and must be clearly communicated in advance of each assignment.
3. Tools for managing expense claims in ESN
If you want to guarantee optimum management of your expense reports, you need a best-of-breed” solution solution dedicated to business expense management is the ideal solution.
Tool 1 : intelligent process automation
Even if you already have an ERP system with an expense management extension, dedicated expert software can help you automate your business processes more effectively. More refined, more intelligent, the automation will adapt to your business by taking into account your specific needs, such as :
- The nature and location of mission orders
- Your consultants’ periods of presence and between contracts
- Rebilling of costs according to contract negotiations
It will also manage the key stages of your expense report management, such as :
- Capture the receipt and key elements of the expense
- Reading and extracting deductible VAT to facilitate recovery
- Checking, validating, reimbursing and re-invoicing expenses
- Generating and exporting accounting entries
Tool 2 : managing foreign currencies and local rules abroad
For complete and efficient management of your consultants’ expenses, you also need functions for automatic translation of foreign receipts in your company’s official currency. In the same vein, if your consultants are on an assignment in Europe, it’s a good idea to see the amount of intra-Community VAT associated with the expense, so that you can reclaim it from the issuing country.
Tool 3 : dematerialisation of travel receipts and invoices
The dematerialisation of supporting documents is now a standard feature of all company accounting departments. It offers a guarantee of compliance in the event of an URSSAF inspection, while ensuring the same legal value as that assigned to paper documents.
By using dedicated expense management software, you can integrate paperless receipts for your consultants’ expenses and simplify their accounting. The same applies to travel invoices, which you can attach to your mission order. Everything is captured and stored in the same space.
Tool 4 : intelligent management of expense claims
Expense report software provides a framework for expense management than a simple ERP add-on. Some solutions are true monitoring tools, offering interactive BI reports to provide an in-depth look at trends in your company’s professional spending. This means you can forecast your expenses from one year to the next and adjust your expense management policy in line with your business objectives.
Optimising expense management in an ESN requires a strategic approach. By understanding the specific challenges, implementing an effective strategy and using the right tools, you can establish optimal management that promotes financial transparency and consultant satisfaction within your ESN.
