Expense Policy Compliance Revolutionized
by Himani Joshi, on Sep 2, 2017 12:01:51 PM
Business expenses by employees typically have expense policies to ensure that they’re compliant with local laws. A proper implementation of these policies sits at the core of expense management process in any enterprise, ensuring a continually checked flow of money and providing control, visibility and insights into business expenses. However, expense policies often end up becoming a source of frustration and problems because of the complexity involved in enforcing them.
The Story Before Fyle
This is a story of a company (let’s call them Acme Inc), which was handling expenses using manually filled expense forms and spreadsheets. With over 2000 employees and a significant number of expense claims, Acme Inc had a comprehensive policy document spanning over 20 pages. This situation posed several challenges for Acme Inc, most of which are pretty common across businesses that rely on a manual process of policy checks.
- Inconvenience for employees: Since most of the employees do not read the policy document thoroughly before submitting claims, they may not be aware of possible issues with their claims until too late.
- Lack of audit trail: Many times a policy violation is justified for business reasons. This justification is often in emails and SMSes. Not having clear audit trails can make the process of auditing a major problem.
- Friction between departments: In some cases, finance may find some policy violations and send it back the files to the employee, who would then make necessary changes and submit again. This process would repeat till all issues are resolved, and would thus cause a lot of friction between the employees and the finance department.
- Enforcement difficulties: The number of policies and the level of complexity can grow as the company grows and the amount of money spent on employees is increased. Many times policies involve location of the expense, distance and class of travel which are very difficult to check. With the manual process, the element of human error is quite high, as is the time taken to perform all the policy checks. Sometimes, the complexity of the policy can even make it practically almost impossible to be implemented on a large scale manually.
- Duplication and fraud: With hundreds or thousands of employees submitting hundreds or thousands of expenses, it becomes difficult to catch any duplicate bills submitted and the window for fraud increases. Visit the blog on How to Identify and Prevent Expense Frauds for a more comprehensive guide on the subject.
Fyle's Expense Management Solution
Fyle boasts of a sophisticated policy engine that can be used to implement highly complex expense policies. Fyle provides a self-service mechanism to finance teams to add/modify expense policies.
Fyle Policy engine is capable of addressing any complex policy configuration. A few examples of policies that are are being used by our customers are
- Enforce a monthly cap on mobile reimbursements for sales department to a certain amount, based on the employee’s grade.
- Flight expenses that exceed a threshold must be approved by VP of Sales
- Hotel Expense based on the type of Country or city.
- Hotel Reservation caps when breakfast is included / not included.
- Identifying a violation in case of change in allowed travel class, based on employee grade.
- Mandatory receipts for expenses above a certain amount.
- Employees above grade 13 can only book flight tickets if distance between cities is more than 500km
- Limits on local conveyance expenses depending on business activity. Fyle can support policies that involve external data sources like CRM data.
Once expense policies are enabled, Fyle takes care of compliance in real-time. This is possible because of our sophisticated data extraction engine. As mentioned in our earlier post, Fyle has a nifty Gmail and Outlook add-on that can help employees record expenses from within their inbox. In this example, the company has a policy that a cab bill greater than INR 100 requires an explanation. When an employee attempts to submit a bill from Ola Cabs for INR 208, a dialog opens up asking employee to justify the expense.
Subsequently, the policy violation is highlighted to approver and admins who may choose to allow the exception or reject the expense.
When Acme Inc came on board, Fyle automated the entire process of expense management for them reducing the manual work to just a few clicks. Policy checks that would otherwise takes weeks, now are happening in real time within seconds. The benefits that came from this were increased transparency, reduced friction, a clear audit trail, fraud prevention and many thousands of man hours of productivity saved. Expense policies are central in the business expense management process, but implementing them has traditionally been error-prone, time consuming and frustrating. With an automated system like Fyle, it is possible to stay compliant, maintain audit trails and prevent fraud while being extremely employee friendly and transparent.
Sign up for Fyle today to give it a try yourself.