So, you have switched from manual to a new expense management system. How do you determine it is benefiting your business?
Although everything is going smoothly, how do you know whether the transition is successful? Here are a few expense management Key Performance Indicators (KPIs) that help you benchmark yourself against your peers and take action to improve your expense management program.
What is your company’s average airfare or hotel rate in top destinations? What percentage of your travel bookings are made through the online booking tool? What percentage of travel bookings are made through preferred airlines or hotels? You have to know all these metrics to understand whether your travel management program is working good. Now, here are a few ways you can measure, benchmark, and take steps for improving processes.
Expense Audit Rate
The expense management system provides a better way to audit expense reports than manual audits allowing you to set up rules and flag high-risk reports. The metrics will show what percentage of expense reports your accounting team is reviewing. The lower the percentage, the better you are at managing the process.
Expense Compliance Rate
Check what percentage of approved expenses complies with company policy. Getting that number to be 100 percent proves your expense reporting process is working efficiently.
Expense Approval Time
Is the reimbursement process taking days or weeks? This would have a major impact on the employee satisfaction and help for cash forecasting.
How many approvers have to sign an expense report before it gets reimbursed? This is a key metric as lengthy approval chains will have a direct impact on the entire reimbursement cycle.
Are employees submitting expenses soon after they incur or waiting months to do it? Long cycle times have a negative impact on visibility. Ideally, the time should be in days or weeks rather than months.
Card Expenses Age
Corporate card expenses is another metric that has to be considered. You have to control the speed of employees submitting corporate card expenses so you can avoid late fees. If the expenses are more than a month old, they are at a higher risk of being charged penalty fees. Automation encourages users to quickly submit corporate card reports and get approved for payment.
Corporate Card Spend
As long as you are submitting card expenses on time, corporate card programs have many benefits for employees and companies. The company can benefit from rebates provided by the corporate card provider.
These metrics offer a great way to measure the success of the expense management program, allowing T & E professionals to improve the expense management program.
Request a demo to know how SutiExpense can help your business.