Credit card receipt management seems like a straightforward process, but construction companies face industry-specific challenges, including its decentralized nature, that complicate receipt collection and reconciliation. Understanding what these difficulties are and how you can overcome them through best practices and taking advantage of technology will help ensure the accuracy and efficiency of your company’s receipt management.
You may be wondering why your credit card receipts are important to keep in the first place. Receipts act as a clear record of your company’s financial transactions and ensure the transparency and accuracy of your projects’ expenses, which is essential for staying compliant with payment regulations and within budget.
Receipts also act as documentation if you face a tax audit or payment dispute. You can’t claim a business deduction on your taxes for expenses that aren’t backed up by receipts, so it’s critical to hang on to them for this purpose. And, in the event a supplier, vendor, or client brings a legal claim against your company, you’ll want proof of payment on hand to dismiss the case quickly.
Your construction company manages expenses from both in-office and field workers and across numerous projects, which immediately increases the difficulty. You’re facing:
Your back-office accounting team, controller, and CFO are completely separated from your construction worksites, making it difficult to view and manage project expenses in real time. This situation also makes it harder to collect, reconcile, and reimburse receipts.
It’s not uncommon for construction employees to make small purchases to complete a job using their own money. But out-of-pocket expenses can be difficult to manage when workers don’t code receipts properly or submit them promptly. When this happens, it can hurt the accuracy of your financial records and cause reimbursement problems.
Construction companies deal with more complexities like multiple job sites, which make it harder to collect and keep track of receipts. Receipts can get damaged from being in an outdoor environment or simply get lost within a busy, fast-moving work site. Misplaced receipts can cause delays in reimbursement and discrepancies within a project’s finances.
Traditional receipt collection and management systems are less efficient, relying on workers to deliver receipts by mail, email, or in-person — or requiring your AP team to chase down late receipts. This can cause delays or bottlenecks within your accounting department, slowing down your approval and reimbursement flows.
Managing your construction receipts doesn’t have to be challenging. Following the tips below can help your company maintain accurate records and improve the efficiency of your expense tracking, reconciliation, approval, and reimbursement processes while ensuring you stay in compliance.
Digitizing your receipts not only helps cut down on paper clutter, but it’s also a more efficient way of handling receipt management. Scanning paper receipts lets you digitize the process, and there are even tools available that let your field workers scan and code receipts with their phones so your accounting department receives them in real-time. Plus, going paperless allows you to store your formerly physical receipts alongside digital ones from online purchases.
Having one place to store receipts is essential for well-run receipt management. Without it, you could easily waste time searching between filing cabinets or databases trying to find the receipt you need. It also simplifies the submission process for workers.
You want to be able to quickly find any receipt you need. Organizing your receipts, whether paper or digital, by specific categories such as vendor, supplier, or job project can help you find them fast for reconciliation and reimbursement purposes.
Whether you keep paper copies or digital files of your credit card receipts, it’s important to include key information that can help with documentation, reimbursement, or accounting purposes now and in the future.
After all, you may know what that receipt is for now, but will that be true next month or even later? Annotating your receipts with a brief description of the expense, including the vendor and date of the transaction, allows your entire accounting department to quickly decipher and reconcile receipts.
One way to ensure your expenses align with your budget and make receipt management easier is by developing company credit card and out-of-pocket expense policies. These policies should outline who has permission to use a company credit card and what types of purchases qualify for reimbursement. You should also train employees on how to document and route receipts, so they don’t end up lost or in the glove box of a crew member’s truck for weeks.
While it’s common business practice (and recommended by the IRS) to keep all of your receipts for three years, you don’t need to hang onto them forever. When you’re ready to discard your credit card receipts, make sure to use a secure disposal process.
This is easy with digital files, as you can simply delete them from your system. However, you’ll want to use a shredder for paper receipts to protect any sensitive information they may contain.
If you don’t have a quick and easy way to handle receipts, field workers may feel like submitting receipts is a burden on top of all their other tasks. Instead of handing over receipts as they come in, workers may hold on to them, which increases the chance of receipts getting lost or creating bottlenecks with your accounting department.
Technology eliminates this issue, as construction software apps allow field workers to capture receipts by scanning or taking a photo with their smartphone. From there, they can add job or cost codes, type in notes, and route them to the appropriate AP staffer.
Construction software also makes the reconciliation, approval, and reimbursement process more efficient, as all your receipts are digitized and stored in one central location. Your entire team can find and access the receipt information they need quickly, which not only streamlines workflows but also offers greater visibility into project finances.
With hh2, your AP team can do all of this and more. Our construction software features solutions like Document Flow, with web-based and mobile apps for seamless receipt submission and approval. It digitizes and organizes all your receipts into one place so you can ditch paper forever.
Plus, with its custom routing features, you can route receipts to the most appropriate AP staffer in real time, reducing processing delays and preventing bottlenecks. It even automatically matches receipts with transactions, to further streamline your reconciliation process and reduce manual errors.
Book a demo to see how hh2 can help with your credit card receipt management.