It’s safe to say, expense management is one of the most dreaded functions of running a business!
A common sight one can witness during the reimbursement cycle is, employees drowning in paper bills, and spreadsheets, while approvers and finance teams run around like headless chickens to close the reimbursement process with stringent deadlines.
Traditional means of managing expenses come at a cost, a quantitative and qualitative cost that can dampen the pace of your business!
This article will help you understand the need for the transition from the conventional to the automated Expense Management Software. It will also help provide insight into the must-have features in your automated expense management software.
Are traditional means to expense management affecting the health of your business?
Using traditional means of managing your expenses may seem viable for smaller organisations. With only a handful of employees, validating and managing their spends may not come across as a huge ordeal.
The problem arises when businesses are in the growth stage. Be it for networking, marketing or sales purposes, your employees are required to travel and help your business scale. Here, your employees may sometimes use their own money for business purposes. Hence, it becomes crucial for you to adopt a new age system that helps you achieve seamless reimbursements, for your employees and finance teams.
To help you understand how traditional means could prove detrimental to your business, we have compiled a list of plausible disadvantages to using conventional methods of managing your expenses:
- Time-consuming process
- Labour intensive
- Higher chances of human error and bias
- Increased chances of fraudulent claims
- No visibility into spending trends
- Delayed reimbursements
- Dip in employee morale and experience
- A decrease in productivity and efficiency
Why should you consider automating expense management?
- Cut down on unnecessary spends
- Increase compliance and accountability
- Real-time visibility and transparency
- Save productive hours
- Increase employee satisfaction and morale
Can an automated Expense Management Software reduce manual work?
Managing your expense management, shuffling through hoards of physical documentation and receipts, hovering over multiple dashboards, dealing with policy violations and more are some of the ways businesses waste their productive time.
Manual work, be it data entry or verification of claimed spends, can be a daunting task. This requires tons of patience, manpower, effort and hours of huddling around. Looking through multiple expense submissions, comparing and validating expense claims, and having various back and forth when there are policy violations are just some of the things admins and finance teams deal with regularly.
But what if we told you, automation can solve this entire challenge?
With an automated expense management software, admins and finance teams would spend less than half the time they spend while using traditional methods. Employees can simply upload images of receipts, where the expense management software can automatically extract specifics from it with smart OCR.
Additionally, once all the receipts have been submitted, employees can directly generate an expense report within minutes. What generally would have taken hours to compile and submit can now be dealt with, within a few clicks.
If any inconsistency or policy violation is recorded, the software will flag the expense and notify both the employer and employee immediately. Once this is done, employees can provide detailed explanations for the violations, and the admins now have the right to either approve or reject the particular spend.
Employers don’t need to shuffle through hoards of emails for these explanations. They are all documented and can be accessed whenever need be. This further cuts another time-consuming step while managing expenses.
Ideal features to look out for in an automated Expense Management Software:
We know it can get difficult to pick the right one, with the multitude of options present in the market today. To ease out your pain, we have listed the top features that qualify as must-haves in your Expense Management Software.
This feature allows employees to file expenses on-the-go, from a device of their choice. Similarly, it also will enable approvers to access and accept or reject filed expenses from their preferred device and location. This drastically reduces the turnaround time for reimbursements and eliminates chances of fraud to a large extent.
The problem this feature solves: A significant challenge faced by most employees is the fact that they often merely, just misplace bills. This is an obvious problem that needs to be addressed, considering the number of bills your employees juggle with, at any given point. It is highly recommended that you opt for software that is device agnostic. This also means that your employees, approvers and management teams can file, approve and access expense reports, anywhere and anytime.
This is an essential must-have feature for any automated expense management software. This feature enables employees to click and upload images of receipts directly. Once done, most software also provide an automatic data extraction, that further simplifies the process. Similarly, admins or approvers can view expense reports from a single dashboard to manage expenses.
The problem this feature solves: Traditional means of expense management involves manual data entry for employees and manual data verification for expenses. This not only eats up into their productive hours but also consists of a lot of effort and manpower. This feature helps in combating fraudulent behavior via automatic extraction of data, thereby eliminating the possibility of submission of duplicate bills, exaggerated claims, errors in manual data entry and more.
Having an integration-friendly software further helps simplify and streamline your expense management process. It is essential that you look into the possible integrations that a particular expense management software provides, to understand the pain-points they can address.
The problem the feature solves: Your expense management software comes with a defined set of challenges it can overcome. Yet many challenges may still remain unresolved. These challenges can be overcome with integration with your preferred ERP, accounting and other software to help address specific problems.
This feature is crucial for any expense management software. This enables real-time policy checks on reported expense claims. If any claim violates a policy, the expense gets flagged immediately, and the approver and the employee get notified about the same. This feature saves time and adds a layer of transparency and credibility to your expense management.
The problem the feature solves: Most traditional means of managing expenses require the approver to manually validate each spend to eliminate chances of manual entry errors. Once done, the approver should then check for any policy violations. With this automation feature, you have enough leg space for your finance team to tend to other pressing work.
In case of a policy violation, employees can account for the possible reasons for the violation. The onus of accepting or rejecting the expense claim then falls under the supervision of the employer or admin. Additionally, documented proof of all these aspects helps businesses stay audit ready.
The problem the feature solves: Keeping track of every detail when it comes to every employee who has submitted an expense report can be difficult. The software documents all communication. Thereby, seamlessly providing you with a complete digital audit trail, that helps you stay audit-ready, always.
This feature helps provide insight into what the numbers have to say. It allows admins and finance teams to get an idea of “how much is too much’, thereby curbing unnecessary spends to optimise business functions. With advanced data analytics, businesses can make informed decisions based on what the numbers suggest, rather than ones based merely on a limp. This feature assures you, your choices always have the backing of reliable figures.
The problem the feature solves: Data-driven analytics give businesses in-depth insight into the nuances of running and managing a successful business. Adding a numerical value to ascertain your business hypotheses, is crucial for growth and scale. A critical part of understanding employee behavior, insight into spending trends, frequent spending categories and more is found via data analytics.
This feature enables one-click approvals on submitted expenses. Here, you can view, approve and reject expense reports. All this, under one dashboard. Some expense management softwares also provide the option of customising approval hierarchies with multi-level approvers, where required.
The problem the feature solves: The entire premise for wanting an automated expense management software is to automate and streamline certain aspects of expense management. With this feature in combination with real-time policy checks, approvers can just approve or reject expenses without wasting time on validating individual spends.
Benefits of using an automated expense management software:
We have compiled a list of benefits your management team (finance and accounting teams) and employees may benefit by using an automated expense management software.
Other additional benefits of using an automated expense management software:
- A decrease in processing costs: Cut down your processing costs by more than half. Check the ROI of an expense management software with Fyle’s free ROI calculator.
- A decrease in manpower and effort: With automation, your management and employees can file and approve expenses with just a few clicks.
- An increase in policy compliance: With real-time policy checks and a digital audit trail, businesses can now achieve impeccable policy compliance.
- An increase in visibility and transparency: With everything transparent, it is close to impossible to go about indulging in fraudulent behavior.
- Insight into spending trends: Admins and finance teams with analytics can gain insight into frequent high category spends, vendors, spending trends, and more.
- Faster reimbursements: Turn Around Time (TAT) cis cut down when a software does all the work for you.
Convinced you need an upgrade? Be sure to pay attention to the pointers below.
A step-by-step guide to picking the right Expense Management Software for your business:
- List the current expense management challenges that your management and employees face
- Conduct extensive research based on your requirements
- Sign up for the “Free Trials” and “Demo requests”
- Ensure your management team and employees also sign up for the same. This would provide conclusive evidence in approving or disapproving a particular expense management software
- Based on the feedback you receive from your team, pick an expense management software that best suits your business needs
- Step in into the new-age system of seamlessly managing your expense management woes.
If you’d like to understand how Fyle can help you streamline your reimbursements, schedule a demo today!