Even with carefully regulated spending restrictions on business credit cards, keeping tabs on everything may be a pain. Several organizations have turned to automated invoice processing to boost efficiency and reduce financial mistakes. By automating the expense management process, firms may increase productivity and better monitor their second-largest controllable cost: business costs incurred by their employees.
According to the numbers, it takes, on average, $58 to execute a single expenditure report. On average, it costs businesses around $600 to handle the expense reports of 10 workers abroad on business travel.
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5 Advantages of Using Expense Management Software
You might still need to decide whether or not you need dedicated expense management software for your company. Here are five ways in which expense management software might help your business.
Paperwork & Manual Reporting Are Eliminated
This is one of the top benefits of an expense management system. No longer will you have to manually maintain a mountain of paper records or labor over complex spreadsheets. Your staff will need to keep paper receipts to record spending physically accurately, and then the finance department will need to review and approve those reports. Doing so is labor-intensive and fraught with the potential for mistakes. It is possible for the finance team to make errors while entering data from the spreadsheet into the accounting system, even if the expenditure reports submitted by the personnel are error-free.
One of the top benefits of an expense management system is that workers may take pictures of their receipts with their phones and submit them to the platform using a mobile app, eliminating the need for paper records. After that, they may easily prepare an expenditure report and send it to accounting.
A paper trail makes it more difficult for the finance department to track down the source of a mistake if one occurs.
Expedited Approval And Reimbursements
Approval and payment times may be cut in half when using an automated system for managing business expenses. Finance managers and accountants waste a lot of time waiting for costs to be reimbursed because of the manual procedure of examining each report and passing the duty from one approver to another. Your accounting staff will return from a business trip with a pile of receipt envelopes before the end of the day. Then, they need to compare each receipt against the policy to ensure it's authentic. The employee's reimbursement will be off if they forget to include a receipt or put off sending in an envelope for a few days.
Once one approver has given their stamp of approval, the job moves on to the next in line, who is prompted to finish their portion of the process by the automated system. Following collecting the necessary permissions, the finance manager may easily analyze the spending report and issue a reimbursement.
Defends Against Expense Fraud
One of the major benefits of an expense management system is higher security. Manual procedures encourage employee theft of business funds. You may submit the same receipt again and round up mileage costs. Keeping tabs on such matters is important since it may be difficult to spot fraudulent claims and conduct follow-ups with the employee when they've been processed manually.
Travel expenditure management automation is a simple solution to eliminate fraud in your company's expenses. If the exact cost is entered twice, Automate will notify the submitter (and the approver), so they may decide whether to consolidate the entries or remove one.
You may set up a double review procedure in a customized workflow using your expense management software so that the expenditure is reviewed by someone else in addition to the approver before being reimbursed, increasing transparency and guaranteeing that all expense reimbursements are legitimate and correct.
More Transparency With Money
Not only does manual expenditure management take up valuable time, but it also makes it difficult to see where your money is going in real-time. There is useful information in the reports and spreadsheets, but it may need to be updated when you run your analysis. While accounting software can automatically create accounts, they will only be accurate once you input the most recent expenses. Making rapid and educated judgments is difficult even if your accounting staff reviews everything weekly and provides a report.
The report choices offered by modern expense management software cover everything from spending and excursions to policy violations and reimbursements. If you want to find out which workers are routinely reporting business travel charges that are not following your policy, you may utilize the policy violators report. Run a "Expenses by category" description to analyze how your team spends money. Using the benefits of expense management software, your finance and travel teams will work together more effectively to find the finest providers for air travel and hotel stays with the help of these reports, allowing you to make choices more swiftly. Your company will save money since your procurement staff can negotiate a better price.
Increases Policy Compliance
If an official expense management software is in place, it may be easier to enforce spending regulations, making compliance practically hard to maintain. When several different costs begin to roll in, it becomes difficult for the finance staff to double-check that each has been correctly recorded in the spreadsheet. To ensure all expenses were legitimate, they would have to compare them one by one to the guidelines set out in the company's travel policy. When costs are handled manually, it's easy for transactions that don't adhere to company policy to go through, which means your staff might be being paid to break the rules.
Everything may be adjusted to fit your business's travel guidelines. Approvers will be alerted in real-time if an employee incurs a trip charge that doesn't comply with company rules. Expense reports may be quickly reviewed for compliance and approved or rejected by your team in real-time.
Also, using the benefits of expense management software is a great opportunity to inform your staff about the acceptable spending limits and vendor partners. The policy is conveyed instantly and consistently, and employees are warned if they try to submit an expenditure outside the hotel rate, food allowance, or otherwise authorized by the policy. The staff eventually conformed to the policy after learning about it.
Through automating expenditure management, a typical business may save processing time and expenses by 40-60%, with a return on investment in six to twelve months. The platform has the potential to:
- Reduce the time required to compete for expenditure reports from 35 to 18 minutes.
- Reduce the time it takes to process accounts payable from 22 minutes to five minutes.
- Reduce transaction processing expenses from $58 to $18.
- Reduce the turnaround time for expenditure submissions from 14 to three days.
- 75% less time is required to compile an expenditure report.
Anywhere you have an internet connection, you may use the SaaS administration tool, and you'll always have the most recent version of the program. The most noticeable advantage is the reduced time spent on administrative activities associated with processing expenses. Still, there are also savings in other areas, such as auditing and analysis.
You'll be able to assess and control employee spending more effectively after you have a better picture of how much money is being spent and where it's going once you know exactly what everyone is spending and where.
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Conclusion
A strategic option that may set your business apart from its rivals is automated expense management. You'll be able to rein in expenses, make sure everyone is following the company's rules, cut down on administrative fees, and boost output.
Featured image: Image by Freepik
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