Construction projects are complex and often fast-paced, complicating the process of tracking expenses and managing credit card receipts. You’re dealing with many field sites, multiple trades working at different times, and communication between field and back-office personnel. Field workers and managers may lose receipts in the chaos of a construction site or forget which project their expenses belong to, while accounts payable staffers are left in a time crunch, trying to decipher receipt data and route it to the right people for approval.
All these issues can lead to errors and delays. But receipt management and expense reimbursement don’t have to be stressful, time-consuming processes. Following credit card receipt best practices and using construction software that helps you organize, code, and approve receipts eases the burden on your team.
Here’s a list of actions your construction company can take to improve the handling and efficiency of your expense receipts.
6 Best Practices for Managing Your Construction Company Receipts
Managing your construction company’s credit card receipts doesn’t have to be complicated. With the right systems and policies, your business can improve expense reconciliation workflows and reduce errors and processing time. Consider implementing the tips below to make your receipt acquisition, coding, approval, and reimbursement procedures seamless and efficient.
1. Capture receipts in the field using a paperless, centralized system.
Construction companies can vastly improve receipt management by going paperless. Instead of field workers having to save and keep track of every expense receipt — while trying to remember which project it goes with — you can eliminate the chaos and burden with a digital document system. Workers can quickly capture and code their credit card receipts in the field using app-enabled mobile devices, like smartphones and tablets. Optical technology scans your paper receipts and turns them into searchable data, making it easier for workers to submit and code receipts.
This paperless system also reduces the amount of receipt sorting and processing work for your expense reconciliation team. Field supervisors, project managers, and your accounting team will save time by not having to organize and make sense of piles of paper receipts while also eliminating errors related to manual data entry. Instead, workers can quickly check the digital receipts for job or cost coding accuracy before approving or rejecting the expense.
Having a centralized receipt management system is just as critical as going paperless. It lets your construction company capture receipts, consolidate expense data, and track company expenses through a single platform. You’ll be able to monitor all credit card purchases — no matter the size — and code construction expenses according to your own guidelines, helping to improve reimbursement turnaround times.
2. Properly inform field and office workers on expense policies.
Setting clear and comprehensive expense policies from the start ensures clarity and consistency. You’ll want to define guidelines around which construction expenses are eligible for reimbursement, how to code receipts properly, when approval is required, and how you want workers to submit credit card receipts.
Also, inform team members when to expect approval and reimbursement based on your average turnaround time. Giving your workers a timeframe can help manage their expectations and prevent them from needlessly bothering the back office during the approval process.
Developing expense policies that fit your construction company’s needs is easy with our receipt and reimbursement management software. Workers can scan and code their receipts in the field according to your standards before submitting them for approval — all through their smartphones. You can also set up custom approval paths synced with accounting for more efficient reimbursement.
3. Submit expenses for reimbursement in real-time.
Which scenario would you prefer for your accounting team: under time pressure, trying to sort and approve a month’s or project’s worth of expenses all at once, or gradually approving purchases and expenses as they happen in real-time? With digitized receipts, your construction team can send expenses for processing and approval immediately after the transaction.
Reconciling credit card expenses as they occur instead of batch-processing large quantities at one time is beneficial for your construction company in several ways. First, it lets you account for costs at every step of the project to help you stay within budget and prevent surprise expenses after the fact. Second, it reduces bottlenecks within the approval process, allowing team members to receive reimbursements faster.
4. Automate your credit card receipt documentation and workflows.
The complexity of construction projects means many steps and people are often involved in the expense approval process. Automating this workflow helps speed up the process, delivering your credit card receipts to the right staffers, in the right order, for approval.
With our expense routing and approval features, you can create custom workflows based on roles — like field supervisor, project manager, and accounts payable — or specific staffers. Your construction company can even create its own decision and action options, like routing receipts to specific approval paths based on the expense amount. And send email notifications when new receipts arrive to further streamline your approval process.
5. Use data to analyze expenses and cut down on costs.
Examining data from credit card receipts can help you identify spending trends and give you valuable insight into your overall expenses and vendor relationships. This important information can drive new cost optimization efforts that lead to greater efficiency and profitability for construction projects. McKinsey estimates that implementing a data-driven strategy for capital projects can reduce costs and overruns by upwards of 30 to 50 percent.
Using software that draws data from multiple sources, like your accounting and receipt management systems, simplifies the review and analysis of your expenses. You can easily compile reports with your preferred analytics platform comparing costs to your budget or profits by project, trade, quarter, or other variables so stakeholders can make informed decisions.
6. Keep your credit card receipts for 3 years.
While no specific law or regulation requires your company to hold onto receipts, the IRS recommends keeping records and supporting documents of business expenses for a minimum of three years. This period covers the statute of limitations on a given tax year, and you’ll want to retain records of all your expenses in case of an audit.
Simplify Your Receipt Management with hh2
With 20 years of industry experience, hh2 understands your construction company's unique challenges and needs. That’s why we designed Document Flow with flexible receipt acquisition and custom coding and approval workflows to fit your exact guidelines. Once coded and approved, data seamlessly integrates into your existing accounting ERP system.
We help you achieve more organized receipt management, a smoother approval process, and faster reimbursement turnarounds. Learn more about how our solutions create greater efficiency for your construction business through a demo.