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Best Expense Management Practices- Part 2

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In continuation of the Expense Management Best Practices post, we give you more information on how to simplify the expense reporting process.

Clearly Document the Approval Process

Most often, the approval process gets escalated because of the roles and authorities. Building the approval matrix becomes easy with the expense management solution as it allows you to build approval routes based on hierarchy, thresholds, expense codes, attributes and other additional criteria. Too many approvals will make the process more complex. Therefore, automating approval process can help streamline the process.

Put an End to Ineffective Audit Practices

Auditing expense reports uncovers a number of issues presented by travelers to support their expense claims. The following are a few issues reported by accounts payable department:

  • Expenses submitted beyond the given timeframe
  • Additional tips
  • Reporting international expenses at inflated exchange rates
  • Imposed per diem rates based on corporate criteria are difficult to validate

One important thing to consider is who is performing the audit – whether it is accounts payable or audit staff.  Organizations should have auditors evaluate expense reports but not accounts payable staff. Once the auditing is done, auditors should receive an email stating whether the reports are complying with the policies and guidelines. Conducting regular audits and discussing the results with employees can help organizations.

Centralizing the Process

Earlier, most organizations were dependent on manual intervention to validate expense reports against company policies and make sure that these expenses are routed to the respective approvers prior to payment. This would cost more money to the organization and creates lack of consistency and process continuity. Implementing online expense report software will replace human intervention and offers the following benefits:

Validating expenses against corporate policies and employees can prevent employee from submitting non-compliant expenses. Approval routing rules are implemented based on attributes listed in the expense report. Duplicate expenses can be flagged while auditing. Approvers or accounting departments will have complete visibility on policy violations, management approvals and explanations. All the approved expenses will be automatically transferred to the organization’s financial systems and re-keying the data into financial system for payment is no longer required.