How to achieve reasonable budget control and expense reimbursement?

In a company, the business team belongs to the front-line department, and the team's work results directly affect the company's revenue. In the process of business development, transportation expenses, travel expenses, business entertainment expenses and other expenses will be incurred. I am accustomed to classifying these expenses as business development expenses.

When business occurs, business development expenses will inevitably be incurred; but spending business development expenses does not necessarily lead to an increase in income. This will cause a problem: when formulating budgets or performance-related indicators, the amount of business development expenses becomes difficult to control. Too high or too low will have a negative impact on business development.

A situation we often face is: all the business development expenses are spent, but the performance is not completed. If you go to the person in charge of the business department and ask why, you will get various reasons. But no matter what "legitimate" reasons are given to explain it, the expenses have already been incurred, and the company's profits will inevitably be affected.

So, from the perspective of financial management and internal control, we need to find ways to prevent business expansion expenses from getting out of control, ensure that expenses are sufficient to support business development, and avoid extravagance and waste that will have a negative impact on profits. situation occurs.

Determine the reimbursement department and employee ranks

Determining the reimbursement department is actually to confirm the department responsible for the business indicators of the enterprise. The occurrence of business development expenses is related to the company's income, so the department responsible for the income indicators should be the main expense generation and reimbursement department. Other departments will also incur certain expenses, but the amount is generally not very large.

To give a simple example, during the business development process, business departments will incur business entertainment expenses when contacting customers. Other departments will also have certain business needs, such as the finance department entertaining auditors, etc., but these They are all sporadic expenses and will certainly not exceed the total amount reimbursed by the business department; some departments, such as the technical department, rarely have external contact and communication, and generally do not reimburse business entertainment expenses.

So determining the reimbursement department is the division of department responsibilities, and it is also the process of allocating the company's limited resources. Departments responsible for business indicators will allocate more resources, while some departments will allocate less resources. Not even allocating resources. If the division of responsibilities between departments is unclear, expense reimbursement will most likely get out of control, resulting in a waste of resources and shrinking corporate profits.

Next, it is necessary to divide the ranks of employees. Depending on the size of the company's personnel and the actual situation, the complexity of the rank division will vary.

Small and medium-sized enterprises may only be divided into levels such as department heads, supervisors, and specialists, while large enterprises will be divided into management sequences and professional sequences according to development routes, and different sequences are further divided into ranks according to different conditions.

Different ranks have different work content and scope of work. In the business department, business personnel with higher ranks will be responsible for more important customers. They have accumulated more time in the industry and can expand more. The more customer resources, the higher the amount of business development expenses required; while low-level business personnel may be undertaking projects in the final stage or small customers, and the amount of business development expenses required is limited.

The division of ranks can further help us allocate resources to ensure that resources are tilted towards areas that can bring more revenue and profits to the enterprise.

Develop reimbursement standards and processes

The clear division of department responsibilities can help us develop a clear reimbursement process. Who can reimburse? Who will approve it? Make it clear how reimbursement documents are transferred between departments before they are finally confirmed.

While determining which departments and personnel need to approve the process, it is also necessary to clarify which projects each department specifically approves. The business department will approve the necessity and authenticity of the reimbursement, and the financial department will review the completeness of the documents and the accuracy of the data to evaluate whether the standards are exceeded. If the responsibilities of each department in the approval process are not clear, the process will become a formality and there is no way to ensure that the final result is based on real business happenings.

Reimbursement standards can be determined based on business conditions and employee ranks. For example, the monthly upper limit for transportation expenses can be determined according to different departments and ranks. For example, the monthly upper limit for transportation expenses reimbursed by the business director is 1,000 yuan, the upper limit for senior sales reimbursement is 800 yuan, and the upper limit for junior sales reimbursement is 500 yuan.

Business entertainment expenses can be controlled by adding a single upper limit on the basis of the monthly quota. For example, the upper limit of monthly business entertainment expense reimbursement for advanced sales is 4,000 yuan. If a single business entertainment expense exceeds 2,000 yuan, additional approval personnel will be required. Travel expenses can be controlled based on the scale of the city where the business trip is taking place. The travel and accommodation expenses in first- and second-tier cities are quite different from those in third- and fourth-tier cities. The upper limit of reimbursement can be determined based on the average consumption level of the city.

Reimbursement standards will also convey a corporate culture and guide employees' daily work, but the premise is that management needs to lead by example. If the management maintains a simple style, does not waste too much when traveling on business, and does not choose high-priced hotels and high-priced air tickets, then this will be passed on to various departments as an implicit standard, forming a simple atmosphere within the company, which will greatly Avoid extravagance and waste to a certain extent.

Assess the rationality of the total cost

The total amount of business development expenses is generally controlled by budget, and the budget execution results will be directly linked to the performance evaluation indicators. The advantage of this is that the company Interests are linked to personal interests. Poor budget execution results mean that performance goals cannot be achieved, which affects personal bonuses and draws everyone's attention to budget management and performance appraisal.

If you want the budget to be implemented smoothly, you need to evaluate whether the budget amounts are reasonable, especially for business development expenses. The budget is too loose and the business development expense quota is too high. The remaining quota is usually not carried forward to the next year, so each department will try its best to use up the quota this year, which can easily lead to extravagance and waste, and also lead to fraud. If the budget is too tight, the business department will be tied up in business activities and excessively constrained by the budget, which will affect business development and also send a negative message.

Whether the quota is reasonable, check the ratio of various expenses to revenue. This ratio will not be fixed. A 15% increase in revenue does not mean that business development expenses will also increase by 15%, but the ratio needs to be controlled within Within a certain range. This proportion calculation can also split the income structure, such as existing income and incremental income. Under normal circumstances, the business development fee spent to maintain the inventory will be lower than the cost of developing new customers, so the ratios can be formulated separately. control. It can also be split according to different business lines. Each business line will confirm the proportion separately based on historical conditions, and finally the total business expansion fee will be obtained.

It can also be confirmed based on the average number. For example, there are 10 senior salesmen and the average business development fee is 3,000 yuan/month. There are 5 junior salesmen and the average business development fee is 1,000 yuan/month. The total is 35,000 yuan. Yuan/month. This simple calculation is suitable for new businesses or startups that are just starting out. Because the business has not yet been fully developed and there are few people, this simple method can be used. But when the business begins to mature, the results calculated by this method are too rough and difficult to control.

Strengthening the approval of expense reimbursement

On the basis of determining the expense reimbursement process and clarifying the responsibilities of each department and the key points for approval, the Finance Department needs to further pay attention to the rationality of expense occurrence and the coordination between departments. , project refinement.

The most basic thing for expense reimbursement is to review the authenticity and completeness of the attached bills. The items shown on the bills must be consistent with the reimbursement items. In special circumstances, there will be substitute bills, such as some sporadic expenses without invoices, reimbursement Use other invoices to replace them. This kind of situation should be avoided as much as possible. If it cannot be avoided, it is necessary to control the amount. It cannot be too large. It is also necessary to specify the range of invoices that can be used to replace invoices. Which documents need to be submitted as attachments for reimbursement can be clearly announced directly in the expense reimbursement system to facilitate inquiries by various departments.

The person applying for reimbursement needs to indicate the reason for the expense in the process and clearly identify the project or customer to which it belongs. If it involves sharing between two departments, it is best to indicate it directly in the reimbursement process to avoid subsequent disputes between departments. A dispute arose over the amount to be shared. These explanation items will affect the accuracy and precision of financial accounting, which will in turn affect the execution of budget control and the development of financial analysis.

There will be some exceptions in actual business development. We cannot avoid or prohibit the occurrence of these matters. We can stipulate the approval procedures for exceptions in the system, adopt a one-case-by-case approach, and conduct separate approvals , confirm whether reimbursement can be made.

Centralized management of some expenses

In budget management and control, you can consider using centralized management to decentralize departmental power and create supervision and checks and balances between departments.

For example, part of the business entertainment expenses will be the purchase of gifts given to important customers during holidays. Compared with separate procurement by various departments, unified procurement by the administrative department will result in more favorable prices due to scale effects. At the same time, the administrative department reviews and controls the quantity and unit price of gifts, which can minimize risks and procurement costs.

In addition, there are currently some platforms on which you can open corporate accounts and achieve control by allocating quotas to different departments and personnel. For example, in the enterprise Didi, the administrative department sets up and allocates accounts and quotas. Employees use the enterprise Didi to take taxis. The administrative department applies for invoicing and exports usage details every month to facilitate financial accounting. This not only facilitates the business department, but also strengthens the control and management of transportation expenses.

Batch release of expense quota

The worst situation caused by out-of-control expenses is that in a certain month of the year, all the expense quota has been consumed, but the performance is far behind. Far from meeting the standards, this situation will cause losses to the company and also mean that financial management fails.

In order to avoid this situation, you can consider releasing the fee limit in batches. For example, some expenses have been reduced from the original annual control to quarterly control. For example, travel expenses, with an annual budget of 500,000 yuan, were originally controlled on an annual basis. As long as the budget does not exceed the limit, they can be reimbursed. However, in order to avoid extreme situations, it can be controlled on a quarterly basis. The budget limit for each quarter is the current cumulative amount. This can avoid the situation of advancing the next quarter's quota in advance in the current quarter.

You can also consider gradually releasing the budget quota according to the performance completion status. When the quarterly performance is completed, the entire business development budget budget quota for the next quarter will be released. If it is not completed in the current quarter, the quota can only be released according to the completion ratio. This can also avoid extreme situations.

The specific control method can be arranged according to the business model and operating conditions of the enterprise. The prerequisite for releasing the quota in batches is the tracking and communication of budget execution. The Finance Department needs to synchronize the current budget execution information to the corresponding departments to let each department know about their current problems so that they can be improved. At the same time, a mid-year review is also needed to consider whether the overall budget strategy needs to be adjusted according to the current situation.

The control of business departments should not be too loose. An overly loose management environment will breed negative behaviors that affect business operations, while too tight management will cause slow information flow, bureaucracy, poor communication, etc., which will affect business development. .

The tightness of management needs to be determined based on the current development stage, industry characteristics and business model of the company. However, from a financial perspective, whether management is loose or tight, the bottom line of finance needs to be ensured, that is, financial data. truthfulness, accuracy, timeliness, completeness and legal compliance of business operations.

Some thoughts after the end: When formulating the budget every year, we always bargain with the business department for travel, transportation, and business entertainment expenses. These expenses are basically reimbursed by employees. Unlike payments to the public, this part is also the part that is most likely to get out of control. Therefore, when managing, finance needs to control key risks while ensuring smooth business development. In this way, a single method cannot be used, a simple and crude one-size-fits-all approach, and more flexible adjustments must be made based on actual conditions.