How do you learn from your expense reports and improve your budget and forecast skills?

1 Step 1: Review your expense categories

The first step is to review your expense categories and make sure they are consistent, accurate, and meaningful. You can use the standard categories provided by your company or your expense management software, or you can create your own custom categories that suit your business needs. For example, you can break down your travel expenses into flights, hotels, meals, transportation, etc. or you can group them by destination, purpose, or client. The goal is to have clear and relevant categories that allow you to compare and contrast your expenses and see where your money is going.

2 Step 2: Track your expense trends

The next step is to track your expense trends over time and across categories. You can use charts, graphs, or dashboards to visualize your expense data and spot patterns, fluctuations, and outliers. For example, you can see how your expenses vary by season, by month, by week, or by day. You can also see how your expenses differ by category, by project, by client, or by department. This will help you understand your spending behavior and habits, and identify areas where you can save money or invest more.

3 Step 3: Compare your expenses with your budget

The third step is to compare your expenses with your budget and see how well you are sticking to your plan. You can use reports, alerts, or notifications to monitor your budget performance and track your progress. For example, you can see how much you have spent so far versus how much you have allocated for each category, project, or client. You can also see how much you have left to spend or how much you have overspent. This will help you evaluate your budget accuracy and effectiveness, and adjust your spending accordingly.

4 Step 4: Forecast your future expenses

The fourth step is to forecast your future expenses based on your past data and current assumptions. You can use tools, formulas, or models to project your expense trends and scenarios. For example, you can use historical averages, growth rates, or seasonal factors to estimate your future expenses for each category, project, or client. You can also use what-if analysis, sensitivity analysis, or contingency planning to test your assumptions and prepare for different outcomes. This will help you anticipate your future needs and challenges, and plan your budget accordingly.

5 Step 5: Benchmark your expenses with industry standards

The fifth step is to benchmark your expenses with industry standards and best practices. You can use data, research, or benchmarks from external sources to compare and contrast your expenses with your peers, competitors, or industry averages. For example, you can use surveys, reports, or articles to see how your expenses compare with other businesses in your sector, size, or location. You can also use guidelines, recommendations, or tips to see how you can improve your expense management and efficiency. This will help you identify your strengths and weaknesses, and learn from others' experiences and successes.

6 Step 6: Improve your expense processes and policies

The final step is to improve your expense processes and policies based on your findings and feedback. You can use strategies, actions, or solutions to optimize your expense management and control. For example, you can use automation, integration, or simplification to streamline your expense reporting and approval workflows. You can also use communication, education, or incentives to align your expense policies and goals with your team's expectations and behavior. This will help you reduce errors, fraud, and waste, and increase compliance, transparency, and accountability.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?