Historically HR and finance have not been the best of friends mainly due to a perception that one cares about people and the other about money. Still today in many organizations, human resources and finance are two distinct business areas and sometimes with nothing related to each other.
Who is in charge of operating employee expenses in companies?
The same question appears when it comes to the Employee expense management. Expense claims are typically considered a purely financial matter. The CFO or financial controller creates the process and sets the rules, and employees simply have to follow along. But is it always like this? Because expenses impact directly the human resources department as well and some companies decide that HR operates payroll compliance. So which department should be in charge of expense management ? And what is the best way?
Let's take a look at each sector and their standpoint to highlight the most important arguments.
HR department position
Speaking from HR perspective, HR objective is to provide the organization with well-motivated employees and enhance employee capabilities to perform the present job. Expense reimbursements are an integral part of this objective, because it plays a big role in employee satisfaction. And today more than ever companies realise the importance of keeping their talent in house. In this case HR can not ignore the essential part of expense management in the department today, because more than seven out of 10 (71 percent) would likely look for another job if their employer were constantly late in reimbursing their business expenses.
It is up to the HR to reimburse employees on time, ensure there are no obstacles hindering employee satisfaction, and help the staff stay motivated at all times.
Finance department position
On the other hand, the Finance department is usually responsible for managing a company’s income and expenditure, including forecasting and budgeting. They assist in setting the direction for the company’s future growth, and making sure that day-to-day operations contribute as much as possible to realizing company vision.
Based on this, the finance department is the one who is in charge of company expense management policy. Tasks like filing expense reports, tracking company spending or establishing a few expense management basics are on the finance team to-do list.
This split between HR and Finance
Talking about responsibilities of two departments, it should be mentioned that it drastically depends on the company size. Based on the size of a business, a human resources department might fall under the finance section, or it might function as a stand-alone department. The decision about where to put the expense management responsibility often depends on the backgrounds of the company’s staff members and what services the HR department provides.
Teamwork for more productive employee expense management
The good news is that while a disconnect between HR and Finance used to be a common issue, more businesses are catching on to the benefits of the departments collaborating, with 35% planning to create a shared Finance and HR function within a year and 46% of Finance and HR saying collaboration between them has significantly improved.
For both Finance and HR teams to succeed, both need to have governance over employee data, enabling both departments to understand key factors that impact their capabilities, including payroll, reimbursement and engagement in business-wide systems. If HR and Finance have disparate data sources then they are likely to miss key opportunities which can help both of them meet their objectives. Not only that, they will likely both have conflicting views on the best approach to improve objectives like expense policy and reimbursement
Jenji can help HR & finance departments to find synergies
Thankfully Jenji has thought about the solution for the better collaboration between two departments and managing employee reimbursements doesn't have to be a pain point for HR & Finance sections anymore. A digital expense management solution can not only be helpful for HR & Finance teams but also offers many other benefits. With the Jenji app, employees can scan receipts with a cell phone camera during a business trip, so the HR team should not be in panic when some employee loses invoices. Our software analyses the submitted receipts using an optical character recognition (OCR) process and processes them accordingly. Additionally, Jenji allows companies to comply with the legal framework and retention periods. The process complies with the requirements of tax law, and the processed documents are available at any time for employees of the company itself, as well as for the tax office.
You want to know more about our solution? Do not hesitate to contact our team at firstname.lastname@example.org. We would be happy to assist you!