Track Employee Expenses
If you are worried about the rising costs of maintaining your business facilities, you might also be worried about reducing employee costs. Employers are often shocked at the staggering levels of employee costs and are often unable to properly track these expenses. With the right mechanism in place which will help them to track employee costs, they can effectively plan a budget that will reduce overall expenditure, leading to better checks and balances.
In this article, we shall discuss how you can use HRMS to track employee costs.
What are the various expenditures that often fly under the radar?
Businesses provide a number of things to employees these days. They may include phone cards, mobile phones, tablets, home broadband, certain electronic gadgets that may be required for work purposes, and a number of such miscellaneous expenses. All these can be categorized under employee costs and your HRMS will help you to track these expenses.
Other than bonuses and salaries, there are a number of things that you will indirectly spend on employees. These include allowances, health plans, recreation, training and several other costs which are often missed in the CTC. Of course, you cannot include every spend that you make on employees in their cost-to-company. However, it will help you to track how much you are actually spending beyond what their CTC states.
Categorizing employee costs
These hidden costs are often clubbed or bracketed under operational costs, which lead to confusing budget plans. When you do not categorize your spends within the right brackets, you stand to distort your financial statements and subsequent financial planning. An HRMS will help you to track all these costs effectively without losing focus.
How does HRMS track employee costs?
Human resource management systems are equipped with the technology to not only track employee costs, but also help you with controlling them before they go out of control. HRMS tools come with expense tracking modules which help to automate making estimates, tracking costs and analyzing how best to reduce costs.
HRMS tools can be customized to reflect the kind of usual spending that you make on employees. This may not be possible if you chose to do it manually or if you chose to use a software that is not equipped to track expenses related to employees.
Avoid human errors
HR managers are human beings prone to making errors. It is not always possible for them to keep track of every employee related expense that is made in an organization. Chances are, a number of expenses are inadvertently going under the radar, without you being able to understand where all the money is going. An HRMS solves this problem by tracking all the expenses, rain or shine.
What a manager might forget to do, an HRMS will remember to track. Software programs automatically register and track every expense, which are further categorized and classified to make analysis easy. This ensures that you do not have to worry about how best to keep track of employee expenses.
At the end of the day, it is important to note that tracking expenses is very important for the health of an organization. Most businesses today fail to automate expense tracking and that includes employee costs as well. The very nature of employee cost is that it goes under the radar, and is difficult to quantify without the help of specialized software programs. Using an HRMS will certainly help you to solve this problem and keep your organization fiscally healthy.