How to Use Expense Data as a Powerful Asset
Businesses find it difficult to use expense data when it is inconsistent and incomplete. It is also a challenge for them to make appropriate decisions or to negotiate better deals, without aggregate spend data. Inconsistent and incomplete data can affect a business culture and its bottom line. Organizations should implement automated systems to get better expense data and leverage it for positive business impact.
Process automation is the first step in controlling business expenses. By establishing policies and procedures before adopting new technology, organizations can ensure processes are driven by business goals. With an automated system in place, businesses can capture expense data appropriately and efficiently at the point of entry while simultaneously enforcing expense policy. The data will be in a state where they can use it to make better-informed decisions. The expense management system enables businesses to add policy enforcement tools to enforce expense strategies, integrate credit card transactions into expense reports to avoid manual input errors, and incorporate it to an accounting system to get a real-time data about expenses.
To make data meaningful, businesses have to put it into context to make it relevant. When employers determine what matters most to them, they can see the correlation between the business driver and the actual data. At this point, organizations can gain the insight they need to make informed decisions. Businesses should monitor employees’ spending in real -time so that they can make adjustments as required to stay within the budget. They must compare spending from one department to another, and also compare to industry averages or a specific competitor.
Organizations should monitor expense data over time to see if there’s potential for a cost-saving opportunity with a travel vendor. When businesses have the ability to show a travel vendor evidence of company’s travel with real data, they can make a good case to negotiate better rates. Regardless of the technology an organization uses, expense reports should provide a consistent, timely and intuitive way to analyze business data. A robust expense management system with conditional formatting and data visualization tools can help during this process.
Making operating adjustments is the most difficult part of the expense management process. If an organization wants to change its expense policy, first they need to determine what type of change is necessary, plan thoroughly and tactfully execute it. Businesses should train their workforce on the new policies and processes and must explain the business impact of non-compliance.
