Business travel is part of developing supplier rapport, corporate presence, and customer relationships. According to a study made by the Aberdeen Group, companies spend around 7% of their annual budget on travel and entertainment expenses.
With this much money in play, businesses are looking to capitalize on the advantages brought about by robust software solutions.
One of the challenges businesses face is reducing their overheads and streamlining their processes as they expand. A key area where you can focus on is expense reporting where complicated business procedures happen.
The increasing number of employees will require a more efficient system that can process thousands of information simultaneously without crashing. A robust automated expense management solution provides this requirement, which is why many organizations leave their spreadsheets for a better system.
Here are the seven benefits an automated expense management solution can give your company.
1. It reinforces compliance
The Aberdeen Group conducted a study to determine the leading factors why companies decide to use an automated expense management software. The study involved over 377 enterprises around the world, with more than 70% of the participants residing in North America.
Compliance with the organization’s T & E policies is the leading factor why companies adopt an automated expense management system. Costs and productivity issues follow, along with the search for a solution to simplify the approval process of expense reports.
Manually processing each request is acceptable if there are only a handful of employees submitting them every month. However, this method becomes impractical when submissions start exceeding the hundred or thousand mark.
It’s tedious to check each one but your company can’t just approve everything that comes into the system either. If left unchecked, the cost of reimbursing non-compliant expenses can have an impact on the company’s budget in the long run.
According to a report, companies spend more than $2 billion annually for approving fraudulent expense reports.
Without strictly implementing the rules for filing T & E reports, employees will think they can indiscriminately spend funds without dire consequences. This will become more difficult to track and fix as the company grows bigger.
One of the benefits of having an expense management system is its ability to automatically check submissions for non-compliance. It can determine if the submissions lack further documentation or if they just don’t fit the qualifications set by the business for travel expenses.
Screening processes are enforced to ensure non-compliant requests don’t pass through the system and gets approved by CFOs and Sales Managers. The accounting department won’t also have to hound individuals to look at the policies and file requests correctly.
The software can be configured to report or automatically reject invalid requests. You can also create a limit on reimbursable expenses so that employees can’t file more than what’s allowed by the company.
2. It improves processing time
There are a number of companies that still use an offline system for managing expense reports. They usually require employees to submit receipts and notes to claim reimbursements. We all know that receipts fade quickly, making them inconvenient to use as proof of reimbursements.
This cumbersome and impractical process spends way too much time and effort on both the employee’s and management’s side. It holds back productivity by forcing you to give more time to filing and reviewing reimbursement requests instead of allotting energy on more important matters.
Using a crude expense management system that requires a lot of manual labor can be detrimental to the company’s efficiency. An automated expense management system like PixExpense is more scalable and robust in handling large amounts of data. It greatly reduces manual entry, therefore decreasing the chances of human error from occurring.
3. It reduces processing cost
Studies reveal that businesses who manually process expense reports spend an average of $31.4 per report. This amount even increased to $41.12 on a follow-up survey the group conducted several years later.
As seen in the figure above, the cost for manually processing reports is 100% more expensive than doing it with an automated expense system. If your company processes hundreds of reports per month, the cumulative cost to the budget is definitely substantial.
Mobile expense management software like PixExpense allows you to snap a photo of your receipts, reducing manual entry and input errors associated with it. There’s also a lesser chance that a non-compliant report will pass through the system, once you’ve set guidelines for the software to follow.
4. It enhances productivity
The time spent by employees in creating and submitting reports on a manually maintained expense system can hamper productivity up to a certain level. Add to that the time managers and CFOs spend in reviewing and approving reports, and you get a lot of hours wasted on something that could have been done more efficiently.
Imagine manually processing hundreds of these requests every week. You’ll be spending your whole week just to check these reimbursement requests, robbing you the time you should have spent on doing other work responsibilities.
Automated expense systems like PixExpense lets you manage expenses with just a few clicks. No need to fill out long forms and attach a lot of documents to your travel expense reports. All you need to do is take a snapshot of the receipt, confirm a few information, and then forward it to your manager for approval.
5. It streamlines processes
Who approves the report of managers? What if the manager is on leave? Who gets to be the temporary approver? Confusion and delays can happen when the role of each stakeholder isn’t clearly defined in the whole process. If these things are not written in stone, employees will have to wait until someone on the upper echelon intervenes and resolves the issue.
If the process is not clear, approval of expense reports can be disastrous. One time you may have the team lead approve the reports and then have the manager do it at another time. Inconsistent practices lead to inefficiency.
With an automated expense management system, organizations can benefit from the standardized process it follows. You can configure the approval flow for T &E submissions your company follows. The system will follow the rules you’ve set without any deviation for a more orderly processing of reimbursement requests.
Stakeholders will know if there are pending items on their action list. Software triggers and notification alerts can be set to remind approvers to look at their task queue.
6. It provides a better overview and comprehensive analysis
Another important benefit of an automated expense system is its ability to generate reports in an instant. It can sift through thousands of data like they’re nothing.
Manually maintained systems can’t do this. With spreadsheets, you need to tweak the filters and develop formulas to get what you want, only to find out you can only do so much with the software’s limitations.
Do you know how much each department spends? Which destination employees often go to? Automated expense management solutions can give you a clear answer to these queries. It can give you a broad view of the company’s spending patterns. You can also dive deeper and look into the smallest details to pinpoint possible loopholes prone to exploitations.
7. Employees get reimbursed on time
Some reimbursement requests take time to get approved because of an inefficient and outdated expense system that can’t handle multiple requests at the same time. Most of the time, though, a poorly-constructed approval system that has a lot of bottlenecks is the culprit.
Mobile automated expense solutions like PixExpense can notify you of pending approvals that need action. You can approve reports quickly on your phone, even when you’re on the road. No need to go to the office and log into your workstation just to approve expense reports. You can access the system wherever there’s internet connection.
Manual systems can’t show employees where their submitted reports are in the approval flow. With an automated expense system, they have visibility on the status of their reports and receive notifications if there are any missing information that needs to be validated.
As a company expands, more employees are hired, resulting in increased expenses. Outdated expense reporting solutions may not be able to cope up with this surge. Manual systems are not only prone to errors but also costly to maintain.
Automated expense management solutions present a number of benefits that can save businesses from unnecessary spending. What you need is a software that’s fast, scalable, reliable, and convenient to use.
With an automated expense management system like PixExpense, you can snap photos of your receipts, have it screened and processed in a centralized system, and generate metrics that can help you make better financial decisions for the organization.
Our innovative automated expense system at Pixmettle is designed to make the lives of CFOs, Sales Managers, and employees easier. If you want to know how you can make your organization’s expense management more efficient, just give us a call.