Do you overlook your travel and expense management?
Business who tend to use traditional expense management reports or ignore expense reporting all together tends to suffer over time. Hidden costs, fraudulent claims, ill-informed decisions will hamper the growth and scale of your business. In this article, we look at the top challenges finance teams face with their travel and expense management and how they can overcome these challenges.
Top travel and expense management challenges faced by finance teams
- Unclear travel and expense policies:
Does your travel and expense policy look boring? Have you liked the experience of reading through those pages? Chances are maybe even you haven't read it thoroughly. Then, it's likely your traveling employees haven't read your policies as well.
As a result, this leads to policy violations, out-of-policy expense claims, and more back and forths for the finance teams. This translates into productive time wasted over something that could have just used the help of an automated software.
- Ineffective receipt management:
As a necessary means of staying compliant, businesses should always ensure they collect receipts as evidence of business expenses. Further, these receipts need to be correctly documented and available in one place. But, this isn't the case when it comes to businesses that use expense report templates to manage their business expenses.
Your receipts may be all over the place in varying formats. To add to the confusion are missing, incorrect, and exaggerated expense reports. Further, all clarifications and justifications for these business expenses go unrecorded as they are done over emails, calls, or word of mouth. This translates to zero clarity and a highly ineffective means of managing business expenses and receipts.
- Manual reviewing and approving of expense reports:
Your employees frequently need to enter all their expenses into an expense report template manually. But, your finance team still seems to bear the major brunt of it. They have to collate, verify and approve or reject these expenses manually within set timeframes.
Additionally, they also need to manually identify claims that are not supported by the expense policy. Once identified, they confront employees to justify such spends. This translates into a costly and time-consuming process. Additionally, due to stringent timelines, they may not thoroughly verify the submitted expense reports. This behavior over prolonged periods can prove detrimental to the financial health of your business.
- Lack of visibility into spending patterns and trends:
Insight into expense trends occurs when finance teams have historical and real-time data in hand. But, businesses who use traditional expense management means gain little to no insight as they have no data to refer back to. As a result, you often end up taking ill-informed business decisions.
- Delayed employee reimbursements:
Businesses who use traditional travel and expense management means often suffer from delayed reimbursements. Each time your finance team notices an expense claim that violates the policy, the entire expense report gets delayed. This further results in a decrease in employee morale, as their money gets stuck in the payment process.
Causes of delayed reimbursements in travel and expense management:
- Employees missing out on deadlines for expense report submissions
- Manual data errors while filling in the expense report form
- Incorrect expense entries in the expense report form
- Missing receipts corresponding to the business expenses incurred by the employee
- Out-of-policy expenses or policy violations
- Fraudulent expense claims or submission of duplicate bills
- Increased processing costs:
Here are some numbers from a report by The Aberdeen Group. Here we gain insight into the actual costs of traditional expense reporting.
The average rate for processing a single expense report: $35.02 - $25.92 on average.
Even if you process a mere 100 expense reports every month, here’s a breakdown of the money you spend:
On a single expense report: $35.02 - $25.92 on average
Every month: $3,502 - $2,592 on average
Every year: $42,024 - $31,104 on average
This is big money.
Further, businesses that use traditional travel and expense management tools run the risk of accepting fraudulent, duplicate expense claims. This further weakens your bottom line.
Why should your business consider automating travel and expense management?
The business world is continuously evolving to become highly receptive to the needs of employees. While the choice to automate your travel and expense management software may benefit you as a business, it also is a boon for your employees. Addressing employee challenges has a direct impact on employee morale and productivity. Thus, also impacting the overall financial productivity of your business.
All this and more, without your finance team slogging it out.
Do you want to hop onto the bandwagon of digital change? Fyle does more than just expense reporting. Schedule a demo today to witness how Fyle helps you put an end to your expense management woes.