Having your team spread all around the country (or even the world in some cases) can provide your business with a notable competitive advantage. After all, not all the talent and expertise in an industry is located in a single city, region, or continent. As an added benefit, working remotely offers your employees increased flexibility, ultimately saving them time on their commute and allowing them to concentrate on their work without constant face-to-face interruptions.
Of course, as you’ll see, there’s a lot that goes into creating and managing an effective team of remote workers.
The Main Challenges of Remote Teams
As more and more companies embrace remote work, it’s important to remember that there are still many challenges in operating a business this way. In fact, the Harvard Extension School just recently put out a study identifying the three major issues that need to be overcome for remote work to be successful on a large scale. They are:
Obviously, all three of these issues are directly related in a lot of ways. Yet they also affect nearly every department function in your average company, from sales and marketing to finance and HR. They are also indicative of broader concern many companies have related to spending.
It should also come as no surprise that the COVID-19 pandemic brought both remote work and its associated challenges to the forefront. With little preparation, many companies suddenly had to mandate that employees work from home, with many managers having to immediately implement digital solutions they had previously been slow to embrace.
Within days of the stay-at-home mandate, platforms like Zoom, Slite, and Slack became invaluable for keeping up team communication and allowing managers to keep track of progress. Understandably, employers became immediately and increasingly concerned with their ability to keep information moving despite the sudden decentralization of their business. In many cases, financial processes were put on the proverbial “back burner.”
Remote Spending: Two Important Principles
There are two main tools that many successful remote teams use to manage and control their spending processes. Before we discuss them, however, we should consider several factors that strongly influence remote spending procedures. These include:
- Asynchronous Communication – Most managers know how important good communication is to a successful team. While it can be difficult to collaborate remotely, it can be even more challenging to use that communication to facilitate efficient spending. Using Asynchronous communication, which functions more as a form of data storage, stakeholders can identify crucial information at every stage of payment.
- Real-Time Reporting – Traditional payment processing tends to keep finance teams and accountants in the dark regarding purchase details. By instituting an online payment solution that supports many different payment vehicles, reports can be aggregated in real-time (and with much more accuracy).
Managing the Three Key Aspects of Company Spending
Before the “Remote Work Revolution,” and certainly before COVID-19, spending and accounting procedures were highly centralized. When employees needed to cover expenses, they could request a company or departmental credit card or simply submit expense reports to their managers for approval. Of course, remote working situations are highly decentralized by their very design. This makes successfully managing spending dependent on three things:
In the past, the purchasing process was quite straightforward. Employees would select the resources they required and then state their case via a purchase order or request. Once approved, they could pay for what they needed with a company card, request a cash advance, or pay for it on their own and apply for reimbursement.
This does not and cannot apply to a remote work environment. Fortunately, the use of virtual credit cards has proven an effective option. These devices function and track purchases in much the same ways as standard cards, with one distinct advantage. This is that each virtual card is can only be used for a specific type of expense. So, should the card be acquired by an untrustworthy party or used by an employee for an unverified purchase, it would simply not function.
How the Process Breaks Down:
- An employee identifies a resource they need for business purposes
- That employee requests a virtual credit card from their respective department head (usually through email)
- Upon approval of the purchase, the manager sends the employee a virtual credit card
- The employee uses it to complete the approved purchase
- In order to establish clear reporting, the employee then attaches the invoice / receipt to the purchase entry in the virtual credit card payment app
- The accounting team immediately receives all the documentation they need
Department Cards vs. Corporate Cards
Issuing credit cards to every single department was once a popular way to streamline corporate spending. However, many large companies found that the logistics of managing so many cards were quite tricky. Corporate cards, however, solve this problem. Aside from offering real-time payment tracking and reporting, they make it much easier for management to established pre-set spending rules, put spend limits on cards, and set cards to only be used for specific item categories.
How the Process Breaks Down:
- Each employee is issued a corporate card
- Each card has a set spending limit
- When a purchase is made, the employee photographs the receipt and uploads it to the app.
- From this app, the purchase and documentation can be viewed in real time by accounting / management.
As an added benefit, these new types of corporate cards are not tied to the company’s main bank accounts, ensuring its assets are never at risk.
People on both sides of the process will often agree that expense reports are difficult to manage despite being crucial to the reimbursement process. However, there are ways to manage reimbursement in a more streamlined manner. Below, we’ll outline how automation can completely eliminate manual expense reporting, spreadsheets, paper receipts, and – most importantly – human error.
How the Process Breaks Down:
- An employee purchases a pre-authorized expense with their own funds.
- They then log this expenditure in their expense tracking app, attaching a photo of their receipt.
- Their direct supervisor is notified of the expense claim and given the option to either approve it, deny it, or request additional info.
- Once approved, the finance team receives complete documentation of the expense, the approval, and everything else they need to remit payment.
The best part of this process is that every step takes place on the same platform, creating a new, centralized solution to the unavoidable decentralization caused by remote work.
Volve is a fully automated reporting and expense management tool. It also includes its own integrated corporate credit card system, allowing businesses to streamline both the expense and reimbursement process. In turn, this allows for greater productivity, increased transparency, and better communication between managers, accounting, and employees.