Small businesses of today are growing at a rapid pace. The hyper-growth brings along with it, a set of repercussions. While some of these challenges have obvious solutions, some don’t; especially when it comes to the financial health of your business.
Employee expenses are the second highest controllable cost in an organization.
However, in most cases, managing employee expenses always takes a backseat.
Here’s how ignoring employee expenses can affect your organization’s financial health:
- Bleeds money
- Loss of productive time
- Decreases financial productivity
- Hampers accounting
- Deprives an opportunity to save money with taxes
- Long reimbursement cycles affecting employee experience
Here’s how streamlining expense reports help manage employee expenses:
- Shortens reimbursement cycles
- Alleviates the pain of repeated approvals/workflows
- Improves employee experience
- Streamlines accounting saving costs and productivity
As a growing business, expense reporting is pivotal to manage expenses. The sooner an organization embraces the best practices to manage expense reports, the better.
Broken expense reporting at small businesses
Reporting expenses shouldn’t be daunting. However, the sheer lack of processes or ambiguity around existing processes makes it tedious for employees. To aggravate the consequences, long reimbursement cycles hamper the overall employee experience.
Here’s how expense reporting pans out for an employee at a small business today:
- The employee needs to save the receipt of every business purchase – irrespective of whether it is a paper, email, or card transaction receipt
- Needs to centrally store receipts for easy access – be it on their computer or personal cloud
- Spends hours of productive time sorting out expenses based on date, location, expense type, and so on
- Manually fills in the monthly expense report on an Excel report template
- Shares the expense reports over email for approval
- Submits a separate folder of receipts for the expenses to the finance team
- Waits to hear back for an update from the approver
- Hears back from the approver with changes over email
- Manually updates the changes and again shares the expense report
- Awaits the next reimbursement cycle to receive payments
- Manually inquires with approver or finance team about payment processing
Here’s how expense reporting pans out for the employer today:
- The approver receives expense reports from multiple employees over different email threads
- She forwards the expense reported to the finance team over email
- The finance team manually verifies every expense in the report to check for policy violations
- The Finance team then reports the violations back to the approver
- The approver informs the employee about the changes required
- She then awaits the updated expense report
- She receives the updated expense report and shares it with the finance team
- The Finance team manually reverifies the expenses
- They then push the report for processing payment
- Once done, the finance team manually updates the accounting books with the reimbursement to stay compliant
Expense reporting becomes time-consuming and tedious. Further, it causes more friction than saves costs. Today, the cost of manually processing one expense report stands at 58 USD. If that wasn’t enough, it takes 20 minutes to create one expense report. These facts shed light on just how unscalable manual expense reporting is.
Fixing broken expense reporting at small businesses
Today’s small businesses cannot afford to lose out on time and productivity. Expense reporting has a massive negative impact on both these factors. Organizations should reconsider and prioritize focus on turning expense reporting a real-time experience for their employees.
When expense reporting turns real-time, employers or finance teams automatically benefit. Here’s how.
- The finance team receive reports on time, thereby, shortening the turnaround time for approvals
- This, inturn, makes accounting easy, resulting in books closing on time
- As a result, it shortens the reimbursement cycles, providing a differentiated employee experience
Turning expense reporting real-time with Fyle
At Fyle, we believe in being present at every point of an employee’s expense. Ergo, we’re always there to report any and all kind of expenses. Here are some ways we help.
Paper receipts – With Fyle’s mobile app, you can easily scan your receipts. On scanning, you can instantly extract and report all the information your organization deems necessary.
Email receipts – With Fyle’s extensions and add-ons, you can easily report an expense, without leaving your inbox. You can do so directly, from your mobile app or web extension.
Mileage tracking – With Fyle, your employees will never have to worry about tracking distance and calculating mileage.
Credit card transactions – You can also reconcile expenses to card transactions, seamlessly.
These are just some of the ways Fyle transforms expense reporting for your organization.