We tried looking for the Google search trend for ’expense reports template’, and unsurprisingly, we saw that the volume has been going down for the past decade. However, Google search doesn’t account for the thousands of businesses who are still using spreadsheets for travel and expense management. Instead of the web being flooded with guides on choosing the best expense management software, businesses perceive expense management as a peripheral business activity and don’t consider investing in automation.
Manual Expense Reporting puts your business on the back foot.
While technological advances have put a man on the moon, organizations are still stuck with spreadsheets and Excel templates. Here is why it’s hurting your business –
Utter Waste Of Time and Money
You can hire manual data entry operators at as low as $2/hour. Why then would you want your $15/hour employees to spend hours doing something so non-strategic for your business? On an average, manual expense reports incur 4 times the cost of an automated expense report, and at least 5 times the time.
And the utter wastage doesn’t stop with your employee’s time – Ever wonder what happens on the end-of-month to your accountants? They’re almost harassed with manual policy checks, auditing and chasing for approvals of expense reports.
Frustrating Receipt Management
Manual systems need the employees to retain any and every receipt involved in the expense – big or small. Managing paper receipts or skimming through your emails to find receipts is cumbersome and frustrating, while the loss of any receipt leads to a cost that will be borne by your employees and the business alike. Employees lose money, and businesses lose intelligence.
Even if the receipts are handled with care and retained, it’s not possible to categorize the expense in order for analysis in the future. This leads to the loss of a lot of meta-information around the expense.
Poor Reporting and Data Hygiene
Any manual entry comes with an inherent minimum error of margin, and those get reflected in your expense reports. While this is the fundamental and seemingly small problem, the way a small error in expense reports can mess up your P&L books can be overwhelming. Consequently, the business gains bad insights into its expenses, and the employees are reimbursed incorrectly.
While spreadsheets can retain the numeric figures, keeping it all audit-ready isn’t possible as the spreadsheets can’t support various receipts with them. Eventually, the expense data gets isolated, and the supporting compliance information gets lost.
When employees are asked to report expenses manually, a business leaves a huge room for frauds in their expense management workflow. Employees use easy schemes like duplication, overstated mileage, fake/altered receipts. While leaders often tend to have full-faith, expense frauds still account for over 12% of worldwide corporate frauds.
Although there are ways to curb expense frauds manually using cross-checking, manual scanning and more, the time-cost of these processes make the RoI shoot off the roof.
Loss of Intelligence
Manual data entry creates a somewhat correct, and often unusable data to analyze. It doesn’t allow for legitimate value addition to the next budgeting session, optimization of expense policies. This leads to businesses losing out on bulk vendor discounts, which can be extremely helpful to keep your bottom-line under control.
Expense data is often also used to craft new employee perks, redesign salary structures, and much more.
Getting Rid Of Spreadsheets
Having the ground clear on the disadvantages of spreadsheets, why do you think some of the organizations still use them? Well, the problem lies in the perception of expense management as a business process. Most organizations look at it as peripheral task, something that is non-strategic and doesn’t add value to the top-line of our business. However, expense management is a valuable business activity that must be invested in. In fact, expense management when done right can actually be a competitive advantage over your competitors!
So how do you upgrade your systems and move from manual to automation? Fyle recently published a guide on choosing the best expense management software, which helps businesses to understand what features to look in a solution that suits their need. Here is a quick comparison of characteristics in manual and automated processes, and all the reasons you should choose Fyle over spreadsheets. Alternatively, you can head to our expense report templates page, and try out a simple experiment, give 2 of your employees to report expenses on spreadsheet reports and make 2 employees report expenses on Fyle. The difference in productivity of both your employees and the finance admin handling expenses will be self-evident.
|Manual/Spreadsheet-based expense management||Expense Management with Fyle|
|Cost||4x the cost of an individual expense report after automation||1/4th of the cost incurred in manual expense reports|
|Time||Slow – consumes a lot of time for employees and even more for finance teams||Ultra-Fast – Expense reports can be created in a single click|
|Receipt Management||Cumbersome to manage hard-copies manually, prone to loss or damage||Automatic storage of receipts securely in the cloud|
|Expense Frauds||Vulnerable – Easy to duplicate or alter receipts||Impossible – Automatic flagging of violations and concrete audit-trail.|
|Analytics & Insights||Unusable data format, poor data hygiene||Detailed, piece-wise analytics at all levels for employees, teams and organization|
|Time to Reimburse||Slow – effected by approval and manual check delays||Automated approval workflow ensure no room for the delay – Faster reimbursement cycles|