According to a research conducted on more than 200 U.S.-based companies, employees face a number of challenges in managing their expense reports. They suffer from the inefficiency of manual processes which eventually lead to lengthy reimbursement periods.CFOs and managers, on the other hand, have little visibility in the spend management of the company, blindsiding them from identifying overshoot expenses caused by exploited loopholes in the corporate travel policies.
Fig. 1. Challenges faced by organizations in implementing their expense management processes (Source: PayStream Advisors)
These very problems are what automated expense management systems aim to resolve.
Your organization faces these very problems. However, the management is still hesitant to upgrade your system for the better. Here are the top 12 reasons why your company should update your current expense management system.
1. It reduces cost
According to a survey conducted in 2014, organizations spend around $23.12 to process just a single expense report using manual methods.
Fig. 2. Average cost to process a single expense report (Source: PayStream Advisors)
The amount spent on processing expense reports vary according to the level of automation the company employs. As seen in Figure 2, fully automated expense management systems are able to bring down the processing cost by around 67% compared to manual handling. This amounts to massive savings considering employees file hundreds to even thousands of reimbursement claims annually.
2. It gives a better financial overview
Automated expense management solutions can generate data that gives you an overview of how your company’s spend management is doing. With this, you’ll be able to pinpoint where you’re spending the most and where you can improve your savings. You’ll also be able to see any loopholes that can be exploited and patch them immediately before they start draining your budget.
While reviewing your expense records, you may see restaurants and hotels that employees frequently visit. You can contact these establishments and make a deal that will get you additional discounts for availing their services. This translates into even more savings, thanks to the detailed reports generated by your automated expense management system.
3. It reinforces better compliance
A survey revealed that around 1 out of 5 employees file non-work related expenses in their reimbursement claims. This includes personal lunch outs and entertainment activities that are not related to business endeavors.
An automated expense management system reduces the risk of fraud. It can catch wrong entries and reimbursement claims that are outside the limits of the company policy.
Rules are also consistently applied throughout the organization. You can’t bypass the system just because you’re also the approver of reports.
4. It’s time-efficient
According to a survey conducted on 500 employees of SMEs, most of them still use spreadsheets in managing their expenses. Their outdated system also makes filing more time-consuming resulting into a lengthy – to the point of annoying – reimbursement process.
Old methods may require you to keep your receipts and submit them together with the claim form. The downside of this is that ink fades and becomes unreadable after some time. This makes the whole process a waste of time and effort.
Automated TEM solutions like PixExpense allow you to take a snapshot of your receipt and submit it together with a pre-populated claim form. With this, employees will have more time to do their job rather than spend hours filing expense reports.
On the other end, manual auditing of filed claims also eats a lot of time. CFOs and managers usually don’t have the time to review each and every submission that comes into the system.
Automated systems can filter recurring reports so that they won’t have to go through manual approval every cutoff. This saves time and effort on the part of the approver.
You can specify an amount that can be automatically approved or rejected by the system. Reports that go beyond the thresholds you’ve set for reimbursable claims won’t get past the system and won’t have to be reviewed by approvers. Combine this with other automated filtering features of your expense management software and you’ll surely save a lot of time from reviewing reimbursement claims.
5. It fastens the approval process
Have you ever experienced delays in the approval of your reimbursement claims? Your manager may be out of town on a business trip or happens to be always in a meeting that they have little time to check submitted claims.
Expense management solutions like PixExpense feature notifications that can alert approvers if there are pending items to be approved. And since it has a mobile app, they can quickly browse through the expense reports and take action wherever they are. No need to wait for them to come back to the office.
6. It’s convenient
Nothing is more convenient than being able to file your travel and expense report the moment you’re done with it. You don’t have to wait to get back to the office, fire up your terminal, and file your expense reports in a rush to make it to the cutoff.
One of the biggest advantages of systems like PixExpense is their mobility. The system features a mobile application that extends its capability to handle expense report submissions wherever you are.
You can quickly submit reports even while you’re on the road. Just take a snapshot of your receipt, fill out a few details, and submit it. It’s that simple!
7. It’ll be easier to file claims
Employees who find it hard to file reimbursement claims are more likely to get discouraged to submit expense reports. This may stem from inefficient processes, long approval methods, or inconvenient systems that hamper the productivity of employees.
Filing can be cumbersome, especially if your organization requires receipts and other proof of expenses to be submitted. There may also be lengthy forms you have to fill out which can be tiring if you have to do it every day or every week.
Automated expense management software like PixExpense can pre-populate certain details when you’re availing the service of usual suppliers like car rental companies, hotel, restaurants, or airlines. This feature makes it faster and more convenient to file reports.
8. You’ll have better control
Using spreadsheets can be confusing if all people are to update it when filing their claims. You’ll lose control over the document and data integrity may be questionable since a lot of people can modify it. It will also be hard to track who has updated what in the process.
This can be avoided with an automated expense management solution since you can control the access permission to certain information. Automated systems can also capture every interaction that happens between the software and its users for better backtracking purposes.
With an expense management solution like PixExpense, you’ll have a central repository where all data are stored. This makes it easier for the finance and auditing team to locate all the information they need when checking the company’s finances.
9. You can back up your data
Don’t worry about data corruption or power interruption. Automated expense management systems can be configured to create multiple backups aside from cloud storage options.
10. It’s scalable
Spreadsheets have a limited capacity and accessibility. Manual entry systems also become unmanageable in the long run due to the thousands of data it must handle.
On the other hand, automated expense management systems are scalable and are able to support business progression. Compared to spreadsheets and manual processes, systems like PixExpense can expand (or reduce) its capacity proportional to your business needs. You won’t have to change into a new system once your company starts hiring more employees and begins expanding its expense policies.
Investing in a scalable expense management system is cheaper and more practical than switching to a new platform every time your business reaches a new growth milestone. The expense management solutions available today are designed to handle both small and large-scale business operations.
11. It can readily be integrated into existing systems
Expense management solutions are usually easy to integrate with your existing accounting system. It can also be configured to handle company regulations, support local and international currencies, and adopt different per diem and tax rates.
12. It’s where the trend is going
The shift into using automated solutions continues to get stronger as more organizations see the efficiency and advantages of expense management systems like PixExpense.
Fig. 3. Trend of how expense reports are received (Source: PayStream Advisors)
As seen in Figure 3, more businesses are shifting to using automated solutions every year. The trend has been veering away from inter-office mail which includes manual forwarding of receipts and reimbursement forms to the finance department.
Why stick with an outdated and dying system? You want a platform that can support your business growth and not something that weighs you down.
We’ve discussed the main reasons why you should upgrade your current system to an automated expense solution. The advantages discussed obviously outnumber the reasons you have for sticking with your dated expense management platform.
Take note that it doesn’t matter how advanced your expense management system is if your employees can’t comply with the company policies in filing reports. Make sure you perform proper knowledge training throughout the organization to educate everyone on how to use the system.
What more reason do you require to get convinced to start upgrading your system to a better one? PixMettle offers an expense management solution that has all the features you need to make your spend handling much better. Simply give us a call and we’ll help you upgrade your existing platform into the only expense management system you’ll ever need.