Employees working in corporate sector often require going to client site. Obviously, the companies in which they work bear the cost of food, travel and lodging. This extra cost that companies bear for their employees need to be managed by experts who can analyze the data and distribute the money to the person concerned. It is called expense management.
However, expense management is a broad term and is not confined to travel and lodging allowances of employees. It has a wide number of aspects. They are the following:
a) Within City, Outside Office: If an employee is required to work outside office (but in same city), then the company is going to pay the extra amount required for food and travel. The employee can claim that amount from the organization since he or she is working out of office because the organization requires that. If for the benefit of business process an employee works outside the organization, be it in the same city or same place where the office is, allowances are given. This is an additional cost to the company.
b) Outside City: Sometimes the employee is sent to a totally different environment. It may be outside the city or outside the state. In that case, the organization bears the lodging, travel and food cost of the employee. The employee may work in the client site or may visit the site where recent projects might turn up. The employee in that case can demand that the expenses bore by him for this outing is given back to him by the organization.
c) Abroad: The employee may be required to go abroad where he is totally a stranger. In that case, the organization not only bears his lodging and food costs but also entertainment cost. Entertainment costs include movie fare, shopping (fixed amount), clubs or bar among others. When an employee is sent outside the country, the travel allowance is also mandatory as in any other case. In this case, it might be very high since air fare is included. The organization generally pays for all the costs incurred by the employee in such case.
d) Under-developed Area: An employee may be required to go to an alien land, where civilization is not so sound and the place is not exactly what we call habitable. Although rare, there are cases like this. In this circumstance, the organization bears the security cost of the employee, since in such a place security is a major issue. Apart from security, food, lodging and travel allowance are also there.
e) Working Overnight: In certain cases, the employee is required to work overnight. In that case also, the employer’s duty is to pay the dinner cost and extra cost for keeping the employee awake for the whole night.
All of the above are extra cost to an organization which requires proper management. Previously, they used to be done manually. Now with the help of Procurement Software Solutions, it is possible to calculate the costs without any human errors. This spend management software, is an indispensable part of any organization for smooth flow of business process.