Improve security and efficiency expense workflows and segregation of duties

If a single individual manages your entire expense management process or large parts of it, you’re leaving your organisation open to errors and fraud. By splitting or segregating your duties among different job roles, you share the responsibility and accountability of all finance functions, encouraging efficiency and accuracy throughout your expense process.

But when it comes to segregating these duties, how do you go about it? What best practices can you take to ensure it generates the best results for your organisation? And once you’ve segregated these duties, how can you further improve your expense workflows?

Why is it important to streamline your expense process and segregate duties?

Without segregating duties, your expense process can be littered with irregularities, and staff burnout is likely on the horizon. Not only is it unfair to place the entire process on one person’s shoulders, but relying on one person also means expenses get approved much more slowly.

Your organisation needs checks and balances to mitigate any security or fraud risks that this one-person operation poses, which means sharing accountability with the appropriate team members.

Splitting these tasks also gives you unrivalled (and much-needed) financial transparency, making it easier to identify spending patterns and unlock better financial planning.

By segregating duties, your finance team can free up some much-needed time to focus on other value-growing business activities like cash flow forecasting or budget reallocation to help you scale your organisation faster.

The challenges of implementing segregation of duties

You might have already come across some of these challenges when implementing segregation of duties. In fact, you may well have started the process, realised what it involved and quickly reverted back to doing the old way. But, we promise, while you may worry that segregating your duties will be a bit of a lift, it’s well worth the effort (and you’ll soon find there are really great software options out there to help).

And, once it’s up and running, you’ll find it easier to manage — and as your company scales, the process will scale with you.

Here are some of the most common challenges finance teams raise when researching segregation of duties implementation:

Maintaining security

By sharing responsibilities throughout the expense management process, you’re relinquishing not only ultimate control but security controls, too. By assigning different tasks to multiple people, you’re opening yourself up to data security challenges. However, working with the right expense management software can alleviate all these issues.

Drop in efficiency

When you introduce others to the expense process, there will be a period of adjustment. Not everything will run smoothly immediately, but these transitions can be better managed by educating employees on your new software, how their new role impacts reimbursement, etc.

It’s important to manage stakeholder expectations at this point and highlight all the benefits they’ll witness after this adjustment period.

The cost

Before deciding to segregate duties in your expense management process, you need to
understand the cost of the technology required to implement your new methods, the impact on business efficiency and the return on investment (ROI) you can expect.

Working with new tech might initially seem pricey if you’re moving from manual management and Excel sheets, etc., but once you understand the time-saving benefits, it’ll be a no-brainer to push your organisation into its new digitally automated era.

Technology adoption

Using new tech can be daunting for all employees, but making sure your software provider can offer training can help you improve user confidence and boost adoption. You need employees to use the technology correctly to improve your business processes.

Best practices for implementing segregation of duties

The challenges above may seem daunting, but you can quickly overcome them with the right plan and software.

Here are three best practices to keep in mind when implementing segregation of duties into your expense management process:

1. Identify key segregation points

Before implementing duties segregation, you first need to figure out which duties need segregation. This initial stage is all about understanding your organisational processes, who currently does what, and whether any person’s responsibilities span multiple functions. You can split tasks into three main functions: reconciliation, recordkeeping, and authorisation.

2. Assigning roles and responsibilities

An important part of duty segregation is assigning the correct roles and responsibilities to other employees. So, for example, you might want to split who authorises and approves expenses and who reviews and reconciles banking transactions, assigning these responsibilities to different roles.

When assigning roles and responsibilities, always check that there’s no conflict of interest, i.e., no one can create and approve the same purchase order.

3. Implement monitoring and reporting mechanisms

Monitoring segregation of duties compliance is essential. You need to see how your new company spending policies are working, and if they’re not, why not? Use technology (like Payhawk) to define custom expense policies to control the types of allowable expenses, with the ability to set expense limits for teams and individuals.

These types of spending controls help finance teams monitor transactions and approvals in real time, helping you regularly audit.

How automated expense workflows boost efficiency

• Custom approval workflows help keep the process moving. No expense sits in the funnel awaiting approval; instead, if the designated approver can't fulfill their duties, fallback workflows kick into place, automatically pushing the expense to another approver. Approvers get real-time expense request notifications, so approving expenses doesn't have to stop even when they're away from their desks.
• Streamlined processes. Your expense management software can automate manual and repetitive tasks like receipt collection and real-time reconciliation, helping increase efficiency and accuracy.
• Faster reimbursements. By automating the entire process, you ensure employees aren't out of pocket for long. As long as their expense follows your expense policy, it's sent straight to their approver, who can accept or reject it immediately.

How Payhawk can improve your expense workflows and segregation duties

As soon as you segregate duties, you can start building in elements of automation to further support your expense processes. This will increase efficiency and communication and streamline the entire expense experience for everyone involved.

At Payhawk, we help companies take control of their business payments once and for all. Giving them real-time access to financial information that helps keep the organisation financially agile and able to make impactful, informed decisions based on accurate spend data.

We have plenty of features to support companies as they scale, including duties segregation, approval workflows, and more.

Robbie Hadfield, Director of Solution Engineering at Payhawk says:

When it comes to the Finance Function, the words 'Governance and Control' are never far away! And at Payhawk, we've extended our functionality to support controls with: 1) The segregation of duties on bank payments. 2) Bulk reviews that allow you to toggle data entry warnings and help finance folks see which transactions they need to review vs. other transactions already within expectation. And, 3) A field suggestion strategy that helps the finance team set data entry rules, reducing the risk of incorrect coding... Any finance manager can tell you that fixing coding errors was always the most boring job at month-end. But with Payhawk, we'll consign that job to history!

Here’s how we can help you implement segregation of duties and improve your business workflows overall:

Role-based access controls. Security concerns? No worries. With our granular access controls, you can manage exactly who has what permissions. Define the responsibilities by employee, manager level, finance team member, etc., and ensure they can only have limited access to the tasks they need. For example, you might just want employees to upload expenses and not be able to edit them after submitting them.

Intuitive navigation and workflow granularity. One of our latest improvements helps clients speed through expenses even quicker than before, enabling custom expense processing steps, including:

• a clearer split for expenses status in the tab
• an extra step for employees to submit the expense (this affects only customers without approval workflows)
• segregation of payment duties in workflow settings. You can now control who has the right to make payments and who is only confirming the payment details!

Audit trail. Payhawk records detailed audit trails, which hold all employees accountable for changes made throughout the expense process, including expense submissions, approvals, and rejections.

Having an audit trail can also help you identify gaps in employee training and rectify problems early on before they become too common.

Automated expense approval workflows. By automatically notifying relevant expense approvers, finance teams no longer need to chase expense approvals manually. Instead, the finance team can set up automation based on expense type and let the workflow run. These notifications help ensure proper expense oversight at every step, helping properly delegate expense tasks to the appropriate person.

Leon Steenbrink CFO at Mercell Nederland says:

I like to use Payhawk because it meets our targets. It meets the target of being more efficient in using our cards and analysing the data, especially in what we spend. And what I love as a CFO is that we are better in control of exactly who can approve what.”

Ready to segregate your duties and streamline your expense workflows once and for all? Learn more about our expense workflows or request a full demo of our spend management platform.