Expense management refers to the process of managing expenses incurred during the course of work. For instance, you may be involved in overseas business travel to enhance client relations or your brand. All the expenses related to business trip needs to be reported, processed and reimbursed. Payment will vary with cash, personal credit cards, and company cards.
Many expense management systems will follow a process-based approach such as:
- Receipts need to be retained and stored
- Expense reports needs to be filled out
- The receipts are submitted to the finance team
- Back office team then process the expenses
But the process does not go as simple as it is. In reality,
- High number of expense reports will get rejected
- The time interval between trips and expense report submissions is more, thus leading to receipt loss
- Including foreign currencies makes the process more complicated
Why expense management system should be modernized?
The following are a few reasons why the expense management process should be modernized.
- Expense management is one of the most overlooked areas in every organization. The costs associated with managing inefficient expense processes are more. Hence, the system should be automated to reduce the costs
- Expense management is a time-consuming process. The time is considerable and can be invested on more productive activities
- Digitizing expenses speeds up the expense process, thus removing the need for manual entry and creates opportunity to gain insights into business expenses
Modern expense management solutions are cloud-based SaaS-based software solutions that offer seamless benefits to the end user. When expense management software is in place, the expense management cycle looks like:
- Download expense management app
- Capture pre-trip details from integrated travel, hotel, and other applications
- Submit requests for automatic processing
- Capture a receipt
- Upload the receipt in the app
- Use OCR capture to populate the expense report
- Submit the receipt for reimbursement
Once the receipt is submitted, users can edit the receipt data, reconcile receipts with company statements, and configure bank details for reimbursement. On the other hand, finance department can obtain real-time reviews of company expenses and make better decisions.
Therefore, modernizing expense management using expense report software is one of the most important things for any business to ensure success.