If you are an employee and productivity-centric business, then you probably already have automated expense management. While at it, you might have invested truckloads of hope and money, awaiting positive ROIs. But what happens when your software of choice fails you?
With annual subscriptions ending soon, this may be the right time for you to calculate the ROI on your current expense management software. Evaluate whether the software has delivered all that was promised. In this article, we discuss the five signs of an expense management software which might be counterproductive.
Turnaround time for expense reimbursements is too high
Despite claims of software vendors, sometimes a particular solution might fall short and bring little-to-no effect to the turnaround time. In some cases, the turnaround time might also shoot up.
There can be several reasons for this issue -
- The user experience of the product is counterintuitive, which makes the product difficult to use.
- The problem with the poor design is that it demotivates people and creates unnecessary bottlenecks.
For example, for employees, the bottleneck can be the difficulty in reporting expenses. While for approvers, a poor design might lead to problems in figuring out the expense reports pending for their approval.
Employees are still unable to submit expense reports on time
Another indicator of a failing expense management tool is when employees don't submit reports on time. If the number of delayed expense reports hasn't come down significantly, then you have a problem.
Expense management software should help accountants close their monthly books on time. Delayed expense reports make this process a lot more complicated.
Few of the reasons for delayed submissions can be:
- Limited means of reporting expenses - This translates to expected delays in submissions, as well. For example, if your current software only provides a web clipper for e-receipts. Here, your employees need to have access to their computers to report expenses. Your traveling employees may not have this option. As a result, they save the receipts for later. This can lead to them misplacing and losing receipts too. All these factors combined, make expense reporting a task.
- No ability to upload receipts in bulk - When traveling some employees might want to save pictures of their receipts. In such cases, the ability to file expenses in bulk whenever possible is the best solution. It also motivates employees to submit reports on time because it essentially becomes a two-step process. The first step is saving all the pictures, and the next step is to report all expenses. With all the documents handy, even the laziest of employees will submit on time.
- Credit card reconciliation needs a lot of manual effort - You might employ a process where employees are required to reconcile their spends with card statements. In such cases, manual reconciliation is a demotivating factor and will often lead to a delay.
You find it challenging to control policy violations
Expense policy violations can be the cause of cash flow leakages in an organization. The money lost can range from anywhere between a few dollars per report to a few hundred dollars per report.
Policy violations can lead to a decrease in compliance and an increase in expense fraud. In these cases, employees are likely to even report ridiculous items.
There was once an instance where an employee expensed a bear rug! Hilarious as it may sound, it is no joke for an accountant who is slogging it out to manage a company's expenses.
If you sense that you are witnessing excessive policy violations every month, then you might want to consider updating your software.
SUGGESTED READ: How can expense policy compliance benefit your business?
You don't have any insights into employee expenses
One of the notable advantages of expense management software is that it allows you to manage all expenses centrally. Such central management of expenses should ideally help in deriving insights to improve operations.
The ability to identify where your employees are spending can be empowering. The best expense management software also comes with in-built advanced analytics. This helps you can reduce the turnaround time, revise expense policies, and mitigate risk.
Do you think you could use a little help from expense analytics? Check out Fyle's expense analytics which helps businesses gain better visibility into employee expenses, spending trends and categories, frequently associated vendors, and more.
SUGGESTED READ: How businesses are leveraging Fyle’s expense analytics
You are unable to take preventive action
One of the significant problems with expense management is that the process is often not in sync with the accounting cycles. Since all further steps are dependent on employees submitting expense reports, it is difficult to get visibility into expenses for a month or a quarter.
Ideally, your expense management software should be able to ward off this problem. Lack of visibility into reported expenses or pending payments can cause unnecessary issues at the end of the month.
A better solution will be able to provide you real-time visibility into the number of expenses that haven't been reported yet. Visibility into expenses which have been submitted but are pending in the payment queue helps you reimburse on time. All in all, it empowers you with insights to provide adequately for the month's reimbursements.
A better expense management system
We believe that the ideal expense management system should be able to ease the expense reporting process for all stakeholders. Right from the employees, managers, and the finance team, everyone should be able to forget about expense reports.
The best case is when expense reports get processed in the background without you having to ever bother about them. We at Fyle, are actively working towards eliminating your expense reporting woes and more. If you think you need a new expense management software, let's chat for 15 minutes.