Economics/Business

Employee accountability/impacts/How to structure

Employee accountability is a process in which workers report and prove the expenses they have had in a given period, activity or work project.

Employee accountability is an essential process to keep the company’s accounts up to date and transparency in the employment relationship.

We prepared this article to explain all the implications of this practice and how to structure an efficient and bottleneck-free process.

Check out!

What is employee accountability?

In general, being accountable is demonstrating how certain resources were spent .

Accountability is very common and even mandatory in some types of organizations, such as public companies, condominiums and cooperatives.

In such cases, companies must make a report detailing all financial transactions carried out.

However, in the corporate sphere, not only companies are accountable, but also employees in the daily life of an organization

Thus, employee accountability is a process in which workers report and prove expenses they have had in a given period, activity or work project. 

When reporting employees, the following information is essential: 

  • how the expenses were made; 
  • when these expenses occurred; 
  • for what purpose the money was used.

In addition, supporting documents , such as a tax note or coupon and receipts, are also essential parts of this process.

It is also worth noting that employee accountability can involve different sectors of the company, depending on the nature of the business.

The most common are: financial, HR, commercial, marketing and purchasing. 

It is mandatory for companies to bear corporate expenses – therefore, if employees incur costs to carry out the work activity, employee accountability is essential for requesting reimbursement.  

Some examples of situations that demand accountability :

  • purchases of materials and equipment for the office;
  • corporate travel ;
  • expenses during customer visits, such as transportation and food;
  • expenses with external sales team ;
  • expenditures on brand activation projects and company disclosures, by the marketing department;
  • expenses with internal events of the HR department .

What are the impacts of this process on the company?

The employee accountability process itself provides valuable information for financial management, such as:

  • how much resource was spent on a given project and activity ― calculation of project feasibility;
  • unforeseen expenditures in the budget and the reasons;
  • tax documents to prove expenses;
  • whether the resources were spent for the right purpose;
  • whether the expenses followed the guidelines established by the company’s budgets and policies;
  • identification of cost reduction opportunities .

And so it has a direct impact on the financial management of the business, strengthening:

  • financial control ;
  • supervision of expenses;
  • compliance with guidelines such as budget, financial planning and internal policies;
  • combating fraud involving the diversion of funds;
  • transparency.

In addition, employee accountability is also essential for building a historical foundation for future planning and budgeting ― bringing them closer to reality.

The compliance department and HR are two other areas that are directly impacted by employee accountability. 

This is because having well-structured accountability strengthens compliance in the organization ― encouraging compliance with internal policies and transparency between employees, the company and departments. 

In corporate travel, for example, optimizing the employee accountability process is one of the best practices to ensure self-compliance.

In addition to directly impacting the company’s finances, employee accountability also impacts the work routine.

The positive or negative impact of accountability is directly related to the efficiency of this process. That’s why having a good plan makes all the difference.

After all, it is mandatory for employees to be accountable, but the company must provide the necessary guidelines. 

How to structure a simple and efficient accountability process?

1. Consult your employees

To structure the accountability process, it is important to hear who is part of it. 

Employee accountability often occurs within the company, even if it is not a standardized or formal process. If you already have a formalized process, dialogue is also valid. 

Ask employees what challenges they face in reporting and what could be improved. 

Map out how accountability currently takes place.

Is there a standard expense report template? Is it used? If not, why? 

Is there an official channel to send reports and vouchers? Are expense receipts scanned or physically delivered? 

What are the challenges for the finance department to assess accountability?

2. Structure corporate expenses reimbursement policy

The corporate expense reimbursement policy , essentially, should detail:

  • which expenses are reimbursable and non-reimbursable;
  • what information needs to be included in the expense reimbursement request;
  • proof of expenses accepted for rendering of accounts;
  • to whom the employee must send the documents (reports and vouchers).

If employees have access to a corporate card, you must also have a corporate card usage policy .

Defining rules for reimbursement and the use of corporate cards are the first step to reduce unbridled spending and to facilitate accountability, expense checking and financial control. 

3. Define the model and flow of employee accountability

Based on the rules on expenses, it is necessary to deepen how the accountability itself will be done.

Define the following questions:

  • which accountability reporting tool or template will be used?
  • By what means should proof of expenses be sent?
  • To whom should the accountability report be sent?
  • Who will be responsible for reviewing and evaluating accountability reports and expense vouchers?
  • How will expense receipts be filed?

At this stage, it is essential to define the accountability tool or reporting template. 

The great advantage of using an accountability tool is that the process, in addition to being standardized, will be automated. In addition, reports and vouchers are grouped, preventing loss of information. 

With tools such as VExpenses, for example, the employee scans the proof of expenditure on the cell phone and the tool automatically posts the expense for rendering of accounts. 

Then just group all entries in an expense report to send for approval through the app itself.

In addition, the app itself checks if expenses are within the policies , identifying duplicate invoices and other fraud. 

Then, the report goes through a workflow for the financial officer, who approves the reimbursement within the platform itself. 

Another important point is about filing expense vouchers .

Remember that electronic documents, such as NF-e, or scanned documents have the same value as the physical document, before the law.

Therefore, it is recommended to opt for the digital storage of tax receipts. Thus, the loss of these documents is avoided, in addition to saving on filing expenses.

Finally, if a spreadsheet is used for accountability, remember to create this template and make it available to employees. 

Don’t forget: the less bureaucracy, the better. It is essential that employee accountability is a simple process and not an inconvenience to those involved. 

4. Set deadlines for accountability

It is necessary to define deadlines in the rendering of accounts to facilitate the routine of the finance and avoid loss of information. 

The more time allowed, the greater the risk of forgetting, losing documents and procrastination

Therefore, define the deadlines for delivery of accountability reports , for authorization or not of reimbursement and for payment of reimbursement. 

To avoid any inconvenience in the middle of the process, the ideal is to count on technology in your favor. 

The rendering of accounts can be done through expense management software, such as VExpenses, where the employee can include the invoice in the system as soon as the transaction is carried out, avoiding the accumulation of documents and the loss of deadlines.

5. Inspect and evaluate employee accountability 

Following the previous steps, implement and publicize the accountability model and flow. Once this is done, it is necessary to follow it. 

Inspect and evaluate:

  • Are the rules being followed?
  • Is the report template or standard tool being used?
  • Are expense receipts presented?
  • Are there any recurring flaws in the process?

To validate accountability and avoid failures and fraud, the finance department must also check employee accountability reports, vouchers, reimbursements and advances.

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