The construction industry is more exposed to economic ebbs and flows than almost any other sector of the economy. In fact, the New Residential Construction Report, more commonly known as “housing starts” is one of the key indicators that acts as a barometer of the country’s overall economic health. As a result of this position, construction companies – be they local custom home-builders or multinational engineering and infrastructure conglomerates – must ensure that they have effective expense management to maintain cash flow and cost control, even during boom periods. This prudence is required both for large-scale expenses such as construction materials and heavy equipment purchases, as well as for employees’ own out-of-pocket expenses.
Supporting Remote Employees
While controlling spend on employee expenses may seem more straightforward than for multi-million-dollar fleets of equipment, this isn’t necessarily the case, for a variety of reasons. First, by the very nature of their roles, construction workers are mobile. On one end of the scale, this means working on a local site each day, and then returning home in the evening. However, for major construction, infrastructure or civil engineering projects, the job site can often be hundreds of miles away from home and located away from major cities, requiring workers to return to hotels, hostels or other temporary accommodation at the end of each shift. These remote workers will incur a variety of expenses: travel, accommodation, meals, and possibly other out-of-pocket items such as laundry.
This highly mobile workforce, which often incurs significant number of expense items, can often lead to both large reimbursement claims and significant challenges in submitting these reports. Without ready access to computers or printers, employees could be left holding onto receipts for weeks before they are able to submit expenses, potentially causing them significant financial hardship, as well as leading to possible billing delays for their employers.
Straightforward Mobile Solutions
One solution to these challenges is using a mobile-optimized expense automation solution. Each employee simply needs to take a photo of their receipt and upload it to the expense solution, or forward a hotel folio email upon check-out. The system will not only instantly know who has submitted the receipt, but through optical character recognition and data parsing technology, will also automatically extract transaction data such as merchant, date, location and amount in order to create an expense item. When employees want to submit their expenses, they simply need to allocate them to a specific project and submit. No receipts to collect, no spreadsheets to fill in, no wait for weeks for expenses to be reimbursed, or hear from accounting departments with questions about specific items. Everything is done online, and notification and communications are made in near-real-time.
Technology considerations out in the field must also be taken into account. Construction workers will likely have a variety of mobile devices – the younger guys will probably have the latest iPhones and Galaxies, while the more experienced team members may well have the lower-spec but ruggedized devices. Therefore, a solution that relies on a downloaded app could lead to widely different user experiences, as well as training/support challenges. A solution which uses a web app, on the other hand, will give users the same experience on any device, and can be accessed just as easily by clicking an icon on the home screen. In addition, many job sites may be far from major population centers, so wi-fi will be limited and mobile network wireless speeds may be slow. As a result, it’s critical that an expense solution requires minimal bandwidth to function effectively, and also has considerable offline capabilities, so your team isn’t stuck.
Of course, the end-user experience only goes part of the way to solving the challenge of managing expenses. Although tradesmen will likely only be working on a single project at one time, supervisors or regional managers will likely be visiting several job sites, possibly for different clients, in any given expense period. Any expenses incurred will need to be allocated to the relevant project and then routed to the correct supervisors for approval. Allowing this routing to be done from a single expense report is essential to streamline the submission process, so the expense solution’s business rules should allow individual expense items to be automatically routed, simply by selecting the appropriate project code.
In addition to intelligent expense routing, expense automation solutions also need to be able to incorporate different expense policy parameters for different projects or locations, and automatically apply them when expenses are being entered. This could include GSA per diem rates for government projects, or specific allocations for meal and travel allowances for each project (which could differ for each client). Automatically enforcing these policies when expenses are entered and submitted will streamline the process both for end-users and administrators, and will also eliminate the potential for confusion or conflict around queried or rejected expense claims.
Whether your organization has a healthy backlog of projects or is facing leaner times, careful control of spend is critical from the boardroom down to the building site. Pick an expense management solution that works with your team’s needs, and you will have one less thing to worry about.
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- Why is Mobility the Foundation of Effective Expense Management in Construction?
- The Cost-Control Benefits of Analytics in Expense Management
- 7 Reasons Why the Finance Team Should Push for Expense Management Software
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