Part of growing and maintaining a sustainable business is carefully managing your expenses. Having a good expense management process will help control your expenditures. It will also eliminate spending issues that may negatively impact your business’s bottom line.
Many start-up businesses start tracking their expenses through logbooks and spreadsheets. However, as the business grows, expenses will be more difficult to scale. Relying on spreadsheets to capture and allocate expense data can be time-consuming and inefficient.
Additionally, if a company continues to use traditional methods of expense management, it can lead to problems such as:
- Inaccurate expense data:
Manual data entries are often tedious and repetitive. This opens up Pandora's box to data entry errors and even expense fraud. These inaccurate data points and miscalculated costs can soon add up and jeopardize your business's financial health.
- Late expense reports:
Constant back and forths for expense submissions, approvals, and reimbursements are tiresome and demotivating for employees and Finance teams. Additionally, having an inefficient expense management workflow encourages employees to delay or postpone tasks causing more issues to occur in the future.
- Loads of paperwork:
Without a digital and automated platform to store data and process incurred expenses, paperwork is inevitable. Additionally, all records and reports will remain on paper that is printed, submitted, and stored for retention. This leads to paperwork piling up with little to no insights to help a business save costs or scale.
- Risk of expense fraud:
Habitual fraud slowly kills businesses. Expense fraud can happen in the form of fake receipts, fictitious expenses, and other costs claimed as business-related expenses. Although small amounts may seem trivial, these, when accumulated, can become a huge loss for the company. Without a tool to verify and be strict about expense policies, businesses may fail to stay compliant and may also run into trouble with the IRS.
The best solution to all these challenges is to automate your expense management system. Technology and innovation-driven expense software can help businesses process and eliminate repetitive and manual tasks. It can also help implement a more efficient, effective, and secure system that will process tasks in as little time as possible.
Benefits of automating expense management
An automated software is a technological solution that puts an end to manual and repetitive tasks while also enhancing accuracy, compliance, and efficiency. An automated expense management software executes business processes within the confines of various algorithms, predetermined decisions, subprocesses, and repeatable instructions. This ensures compliant submissions without any human intervention.
Additionally, an expense management automation solution runs policy checks on expense reports based on the company's rules and regulations. This simplifies the process for all stakeholders involved - from the employees submitting expense reports to the accountants in charge of auditing reports for reimbursements.
Aside from an easier workflow and process, other benefits of automating expense management include:
- Improving accounting accuracy and expense visibility:
Expense software enables your company to track expenses easier. It can easily flag errors and discrepancies that prevent inaccurate expense reports. It also provides a detailed expense management dashboard that will give you better visibility over your expenses.
- Saving time:
Data collection and processing are easier with an expense automation software. It reduces the time spent on submitting expense reports, reviewing and approving them, and reconciling the company’s total expense.
- Reducing paperwork:
Using an expense management software will reduce manual paperwork since data will be inputted directly on the system. The system will then store and read the data making it easier to retrieve information related to payments, receipts, and approvals.
- Improving compliance.
Automation makes it easier for the business to track expenses that it is entitled to deduct. It can also retrieve and access any expense data from the past, which makes audits a breeze.
Automation through AI
The concept of Artificial Intelligence is to copy how humans think and interact with their environment. Machine Learning, on the other hand, gives it the capability to learn and improve continuously. This means that software using AI and Machine Learning technologies can effectively perform tasks as humans do and will continue to learn and evolve over time.
How can AI help automate expense management?
With the application of Artificial Intelligence technology, automation can bring better and more efficient results. Additionally, AI integrates automation and data to create advanced spend analysis to simplify tasks or adjust algorithms based on set company policies. This provides a more wholesome approach to expense management.
Eliminating hard copy receipts using OCR technology
Optical Character Recognition (OCR) is one of the oldest areas within pattern recognition and image processing. It is a process aimed at the digitization of texts of varying formats. OCR automatically scans paper receipts and converts them into electronic formats. This makes OCR a faster, cheaper, and safer alternative.
Faster expense report approvals and submissions
AI can automatically analyze transactions that make expense report submissions and approvals faster and easier. Reports that fall within the expense policy and guidelines can be automatically approved. This prevents reports from getting stuck or delayed. Additionally, through Machine Learning, the software can also suggest more policies based on the analyzed data from processed transactions.
Automatic policy violation checks and updates
Fair processing requires a bias-free system. An automated software will only know what is right and wrong based on the set of instructions it is assigned and fed.
AI and Machine Learning capture and analyze data based on the set expense policies. It can then autonomously categorize compliance-related activities and create alerts on important updates and events. It can also help identify errors and anomalies that may indicate fraud.
Advanced processing & analytics from big data
Big data analytics is the process of examining very large and diverse data sets. It can uncover information such as patterns, data correlations, preferences, and categories that can help organizations make better decisions. Such information can provide competitive advantages across the organization and result in more business benefits such as effective processes and workflow management.
Big data analytics in expense management can also help businesses in evaluating and examining employee business expenses. This can give insights into employee spending patterns, department, employee and category-wise breakdowns of spends, and more.
Transform your business through AI
Companies are beginning to notice the enormous power of Artificial Intelligence. The era of the smart enterprise has already begun, and the only alternative is to adapt or else you will fall behind.
Becoming a smart company allows the workforce to focus on higher-value results, thereby achieving the three main objectives: visibility, focus, and agility.
- Visibility into expense management reports can save your company:
AI provides complete visibility into all business expenses, anywhere, anytime, and by using any device of your choice. It also helps identify and prevent expense fraud. Additionally, the insights gained from analytics will guide you in making informed decisions that help reduce and save costs.
- Expense management automation lets companies focus more on strategic concerns:
An efficient expense management software will reduce the burden of manually processing expense reports. This allows Finance teams to focus on strategizing and improving their workflow, which matters the most.
- Expense management automation increases business resilience and agility:
As the business grows, workflows and business requirements also evolve. An intelligent expense management software like Fyle is one of the best expense tracking apps that will help businesses adapt and adjust to change.
