Let’s accept it - cash advances are essential. They are issued by the organizations to help cover employee business expenses. In most cases, the forms of payment are limited, yet different. They also are dependent on the expense type and amount. Cash advances specifically help complete minor business operations, where other payment forms are not a viable option.
Some of the business operations that cash advances can help with are:
Today’s broken cash advance management
Since every organization has multiple projects, business meetings, and travel expenditures, employees receive sufficient funds to cover their expenses. Managing these advances and subsequent expenses is pivotal to the company's accounting.
Improper or traditional cash advance management can expose the company to the following risks:
Open doors for expense fraud due to independently running processes
Leave room for errors and delays in the reimbursement process, due to manual processing
Doesn’t consider exceptional/urgent requests
Violate multiple travel and expense policies when fulfilling urgent requests
Hamper employee experience due to a crippled process
To avoid these risks, it’s imperative to understand where the problems lie. One major flaw with the cash advance management today is the friction-heavy manual processes.
Employees raise a cash advance request via email or physical paper forms
Managers approve the cash advance request via email or physical paper forms
In case of exceptions, managers approach their higher admins to get additional approvals, causing further delay
Employees are usually in the dark about the cash advances request
Lack of real-time communications regarding payment processing leaves room for hampered employee experience
Lack of information leads to discrepancies in employee expenses reported and the expectations set by the organization
Lack of accounting for non-reimbursable expenses
Additional effort to create independent reports for non-reimbursable expenses