Expense Reporting Analytics That Can Be Useful to Improve The Process
One of the many good things about purpose-built software that helps manage a single organizational process is that users can get all the data needed to analyze the process in one place. This has long been a problem with paper-driven processes or using multiple tools to manage a process, as it takes a lot of effort to get the data together in the first place, let alone analyze it. But with the software, since it caters to all the needs of the process, it automatically collects all the data in one place, and analyzing the data is as simple as clicking a few buttons. Another good thing about the software is that the reports are presented in graphs and other representations that make them easy to understand with a single glance.
So, what are some expense reporting analytics that is useful for organizations?
Time taken to fill an expense report:
One of the more important metrics that organizations need to track is the time taken to fill in an expense report. After all, one of the biggest reasons and the foundation of the business case for expense management software is that it reduces the time it takes for employees to fill in their expense reports. This time can be utilized for better purposes that serve the organization instead of on mundane tasks. Therefore, this metric is something that tells senior managers whether the purpose of deploying the software is working or not.
Of course, there is a learning curve with respect to the software, and one cannot immediately expect the software to show results. Therefore, it is a good idea to see how the time taken to fill in an expense report varies over time. If the graph shows that the time taken is decreasing, it means that the software is doing its work and it is a good investment.
Not all employees can be expected to have the same expenses even though they belong to the same rank or department. Therefore, a better metric that can help understand organizations understand how much is being spent is the average expense per team or average expense per business unit, or average expense per role. This not only helps in understanding how much has been spent in a particular year, but it also helps in forecasting for the coming year. Also, this metric helps senior management put strategies in place to reduce the amount spent on expenses.
Of course, expense management software comes with a feature that allows organizations to limit their employees from reporting expenses that infringe or violate their company policy that pertains to expense reporting. However, not all expenses can be foreseen, and organizations must allow their employees a certain leeway in reporting their employees so that legitimate, unforeseen expenses would not be stricken away at the detriment of the process.
This metric, therefore, can be a positive one in the sense that firms now understand what expenses can be considered legitimate and, therefore, must be included in the expense report going forward. After the great disruption that the pandemic has brought into everyone’s lives, it would not be hard to imagine some changes in the cost structures of various vendors, and these should be factored in to the policy, just to give one example.
Similar to the metric of the time taken by employees to prepare an expense report is the report on the time taken to process the expense report and ultimately provide the employee with the reimbursement. While the first report tells us how much time is being saved by the employee, the latter reports tell us how efficient the firm’s expense management process is.
The expense report submitted by the employee has to be approved by divisional heads, and sometimes, the senior management, before it is sent to the finance team for approval. Instead of languishing in approval hell, the report needs to move quickly through the paces so that approvals and, ultimately, reimbursements are done well in time.
Apart from the above reports, firms can also choose to build a variety of reports, some of them customized to meet their own requirements, with the flexibility provided by the software. After all, this is one of the best features of expense report software that allows firms to get a better grip on their expense management process.