Do your finance teams face challenges in maintaining policy and expense report compliance?
Expense reports can cause serious compliance issues and frauds if overlooked. Employees can make accidental mistakes or forget to attach receipts. To catch these errors that can potentially cost your company, the finance team spends hours sifting through expense reports.
This can prove challenging, and mistakes can occur if there are massive volumes of expense reports to process each month. It might also not be the most cost-effective (or practical) method for your team.
In this article, we will see some of the challenges finance teams deal with when more than 500 expense reports have to meet compliance standards. Additionally, we also look at how your business can effectively tackle these challenges.
Challenges with large influx of expense reports
Expense reports are an integral part of a company’s expense management. When you have employees making multiple business-related expenses, expense reports become an essential means of tracking these expenses. These expenses can be anything from hotels, meals, office supplies to online services.
But when you have hundreds of expense reports coming in, it can be challenging to remain consistent and stick to protocol. This can cause errors and mistakes to slip by. Some of the common challenges that finance team face are:
- Keeping track of expense reports
Expense reports can be used to analyze the company’s financial productivity. It is one of the prime sources to check the financial health of a business. But when there is a large number of expense reports coming in per month, it can get difficult to answer questions like:
- Have all the employees filed their business expenses?
- Have all the expense reports been taken into account?
- How many expense reports have been processed in a month?
- What are the total costs incurred on business travel?
Having no centralized system to store or track the reports can create confusion between the teams. It can also result in difficulty between the finance team and the employees.
- Checking expense reports for accuracy
Employees may make minor mistakes while filing in expense reports. The onus is one the finance team to make sure all the details are correct. This includes making sure the amount, date, and expense type matches with the receipts provided. Also, the finance team has to make sure all the receipts are attached and submitted on time.
When the finance team goes through the expense reports, these mistakes can be corrected — but ensuring all details are accurate cost your finance team their time and effort.
- Ensuring expense report compliance
The expense reports filed by the employees should not violate the company’s travel and expense policy. The policies set by the company can differ based on departments, categories, and employee levels. The primary task of the finance team is to monitor and ensure expense report compliance.
To ensure compliance, the finance team has to go through all the expense reports very diligently. In cases of violation, they need to work with the concerned employee for corrections. Clarification of errors and mistakes also happen at this stage. This further adds to the overall delay in employee reimbursements.
- Reimbursing employees on time
Clarifications and corrections of errors can take up a lot of time. This is especially when there is a considerable volume of reports to go through and correct. When there are constant back and forths for correcting mistakes, the reimbursement period can get stretched for a longer duration.
Additionally, due to poor policy compliance, time-taking procedures, and heavy manual work, the turnaround time for the entire process also increases.
Do you face challenges in your corporate credit card reconciliation process?
Ensuring expense report compliance with a modern solution
Expense reporting and expense report compliance-related challenges can be tackled quickly with the help of expense management software. An expense management software helps the finance team to keep a tab on all the reported expenses. Additionally, tracking and managing becomes an easy job when all the expense reports can be viewed under one dashboard.
How can businesses increase expense report compliance?
- Reducing manual work for all stakeholders
- Increasing employee compliance with defined policies
- Reducing the time spent in each process
Reducing manual work for all stakeholders
There is a lot of hard work and consistency involved when it comes to dealing with expense reports. Even if your finance team is like a well-oiled machine, consistency can be affected if there are hundreds of expense reports to deal with.
An expense management software takes care of all the time-consuming work related with expense reporting. An automated, real-time policy engine can ensure consistency and efficiency at a great length.
With an expense management software,
- All expense reports are collated and collected under one system
- The software makes sure a receipt is attached while reporting an expense
- Receipts are matched with expense reports to ensure they complement each other
Increasing employee compliance with defined policies
For a finance team, greater policy compliance can help them process expense reports faster. Poor policy compliance can mean more time and resources spent on correcting them.
Also, we need to factor in the case that it can be challenging for an employee to remember all the policies. When company policy caters to multiple departments and levels of employees, confusion can occur. Also, if employees are unaware of changes in policies, it can lead to further error and complexity.
In an expense management software, the company policies can be integrated with the system. The finance team has the power and flexibility to incorporate policies for each type of department, expense, and employee level. With an automated solution,
- Can fill the expense report form, attach receipts and submit everything that’s needed in one go
- Doesn’t have to worry about remembering the expense policies and out-of-policy claims
- Can steer clear of policy violations and delayed reimbursements of business expenses
- Can stay updated about any changes in the company’s expense policies to avoid complications
- Can always find the necessities attached with an expense report form
- Can relax as all the violations are automatically flagged and notified
- Doesn’t have to go through reports one by one to check for policy violations
- Can enforce expense policies to ensure robust expense report compliance
How to achieve greater employee compliance with a receipt tracking app?
By reducing the time spent in each process
To ensure expense report compliance, we know that it requires your team to make sure that every report is recorded and accounted for. All these steps are necessary, but each step can take up a lot of time with a traditional manual method. This is where an expense management software comes into play. It helps a crucial role in taking care of all these steps within a short frame of time.
When an expense management software is incorporated:
- Collection of expense reports from employees within a centralized system with unified cloud storage
- An automated software makes tracking of large volumes of expense reports easy, yet effective
- Employees can be sent reminders for activities such as submitting expense reports and clarifying spends
- The software flags any policy violation found. This reduces the time spent checking for violations
How can an expense management software help with expense report compliance?
With an expense management software, your finance team does not have to worry about missing items anymore. They can easily find the forms and receipts in one system. Even if they need to find a specific employee’s report, it can easily be searched and found in under a minute. The software gives you the flexibility to filter and search through your expense report history, as well.
Your finance team doesn’t have to slog over hundreds of expense reports every month. Choose to end the burden of your employees and finance folks by opting for an automated solution! Interested to learn more? Schedule a demo today to see the magic of expense management automation with Fyle!