Travel and expense management is one of the significant areas where businesses must tread a fine line between spending efficiently and cut back on expenses. This work usually falls to the finance team. They are entirely responsible for making the expense management process better, minimize mistakes and control expenses that can otherwise prove costly.
Traditional expense management processes lead to ineffectiveness and time waste to a great extent. Excel spreadsheets, paper forms, and emails are not properly equipped to handle expense management requirements of modern businesses. A streamlined, automated expense management process can aid to identify unnecessary spends and cut back on costs.
Know about Expense Management
Expense management is a set of multiple processes that businesses use to execute payments, record expenses, and monitor spend. It includes keeping tabs on purchases businesses make, such as inventory and assets, and expenses incurred by employees traveling. Moreover, it involves defining and enforcing spend policy and looking for ways to cut down expenses.
Manual Methods: Are They Useful Anymore
Outdated expense management processes result in inefficient cost control and may lead to unnecessary spending. Conventional pen and paper systems are prone to human errors, exhaustive paper trail, expense frauds, tampering, and reimbursements which take weeks to get to employees’ bank account.
Challenges Faced Without Expense Management Tools
- Inability to Control Spending
At times, it becomes difficult to track all your spending, especially when it is spread across various Excel spreadsheets. This, in turn, leads to poor business decisions as you lack the complete picture.
- Waste of Money, Time and Resources
Manual expense management processes are a time-consuming task for everyone. According to the Aberdeen Group research, the cost of creating and approving a single expense report manually costs $41.12, whereas an automated expense report costs $7.17.
- Difficulty in Enforcing Company Policies
Manually auditing expense reports and processing payments can become a full-time job for your finance department easily. Hence, it becomes difficult to enforce business spending policies when they have to go through multiple rows of data.
How to Streamline Your Expense Management
Whether it is automated expense approval for any particular amount, or developing journal entries instantly, you can search for several ways to introduce smooth functioning. Moreover, applying automation for approving expense reports saves a lot of time and money.
Easily connect your expense reporting process with other applications such as accounting software in order to avoid entering the same data twice manually. Not only this saves your time but also eliminates human errors.
- Eliminate Paperwork
Paper receipts fade with time and are also easy to lose. Hence, it is always better to scan the expense receipts with an automated expense management system and back them up on in the cloud.
- Online Reimbursements
When your finance department reviews and approves employee expense claims, you can accelerate the reimbursement process by setting up ACH payments or direct bank transfers and sending the amount directly to an employees’ bank account.
- Record Expense Data
It is crucial to record expenses as and when it takes place to account for all expenses. Travel expense tracker with the mobile app comes in handy so that employees can submit their expenses even when they are on the go for a business trip.
To Sum Up
Streamlining expense management process with a workflow automation system accelerates approvals and eliminates human errors. When employees report their expenses incurred during a business trip, they just need to fill out a simple form and hit the submit button. No emails and spreadsheets. The managers can receive expense reports automatically. The solution throws a red flag if the expenses violate a company’s expense policy.