For many organizations, expense management involves punishing paper-work and numerous cross-checks, not to mention the negotiations! As geographical boundaries expand, companies must focus on fine-tuning their expense management processes. The way to do it is by automating expense management. Here’s why.
According to a SAP travel and expense management survey, it is estimated that on average, a company spends over US$ 20.18 to process a single expense report manually. On the other hand, with automation, the cost of processing decreases to US$ 7.16 per report, and that is a whopping 62% decrease. In India companies spend Rs.250-500 on an average to manually process a single expense report.
Automation is essential to make expense management more efficient. In fact, if your software is tailored to your needs, it’s all the better!
Here are some tips to help make expense management more efficient in your organization:
Have a straightforward and transparent expense policy
A recent poll by Amadeus found that a large majority of employees do not even read or understand their organizations’ expense policies. It is important that you update and announce the policies to improve awareness. Automated systems conform to standard reporting policies and can be customized to automatically reject those expenses which are prohibited.
Keep it straight and simple
Any expense filing process which involves paper forms and multiple levels of clearance is doomed to failure. An efficient expense management system should be cloud-based and be available in the form of a mobile app. The beauty of it is that you can file your expenses or give approvals on the go. It relieves you of tiring paperwork and frees up productive hours. Moreover, the system automatically red-flags duplicate expense filings and detects frauds.
Approve expenses on time
Every company needs to have a set timeframe for submitting and reimbursing expenses. If your employees delay in submitting expenses, fearing paperwork, it can create uncontrollable cash-flow issues for the company. It is important to reimburse your employees on time, so that they do not avoid business trips out of apprehension! Efficient expense management software helps capture relevant information on the go and payments can be completely hassle-free.
Audits may be a scary proposition for everybody. At the same time, regular auditing helps you smoothen out your operational and validation procedures and keep them simple. Digitizing all receipts makes it easier to import the financial data with all the associated files. Electronic archiving of all reports presents a clear paper trail which can be accessed with adequate authorization.
Automated expense management system streamlines the whole process. A transparent process with adequate controls in place reduces costs and makes employees more cautious about their reporting and spending. An organization needs to
- Have a clear and simple policy that encourages responsible spending
- Have a system that enables filing of expenses on the go
- Provide instant processing and approvals
- Ensure visibility of reports
- Stay audit-ready all the time with easy retrieval of data