Finance teams across the globe have been known to help businesses excel with their strategic thinking and forecasting capabilities. While their role has always been critical, recent economic changes have re-emphasized the need for robust financial planning in building a sustainable business.
And for that, the first thing finance teams need is access to all relevant data. Since processing such huge data at scale is humanly impossible, organizations are empowering their finance teams with the right tools and software. These tools will help them extract intelligent data and share insights useful for making informed business decisions.
While some businesses are actively digitizing their finance processes, some of them are yet to start their digitalization journey. Irrespective of what stage you are in, one finance process that you must automate is – employee expense management i.e. expense management automation.
Manual expense management has various drawbacks. It incurs a huge business cost, is inefficient, and is time-consuming. Moreover, it forces your finance teams to spend most of their time and effort on repetitive manual tasks rather than focusing on forecasting expenses, budgeting, and providing cost-saving in the long run.
If you are still managing expenses manually or on spreadsheets, it is high time to shift towards an automated expense management system. It can help you free up your finance team’s bandwidth by automating rule-based tasks. This way, they can focus on making judgment-based decisions to help the business grow.
But if you are still unsure and want to know if you should make the shift, here are some signs that might help.
If your finance team is facing most of these challenges, you should get to an automated expense management system right away:
With automated expense management, you can solve all these problems while keeping your expense reports audit-ready all the time.
As per a study by GBTA, 19% of manual expense claims contain errors or incomplete information. The finance team spends an average of 18 extra minutes/report to resolve these errors. This costs companies an additional $52/ report
Traditionally, the finance & auditing teams manually tally expense claims with the receipt submitted. They then conduct audits by randomly sampling the expense report based on high-level rules and checking for discrepancies. This type of auditing is time-consuming and ineffective in identifying errors.
With the best expense management software, companies can directly configure their expense policies into the system, making it equipped to detect any policy-violated claims and notify the employee at the time of filing itself. This drastically reduces the chances of out-of-policy expense claims.
If the out-of-policy expenses are still filed for some reason; the audit trail (digital footprint of the claim request and related details of the expense) and auto-flagging make it easier for the finance team to identify and resolve such claims quickly.
As automated expense management software ensures policy compliance from expense creation to expense submission, in the long run, it helps companies reduce their spends without hampering employee morale.
For choosing the best expense management software, here is a quick feature checklist you should look for to ensure policy compliance:
Only 43% of expense claims are filed within 15 days of expense, whereas most employees (52%) take 30 to 60 days or more to file their claims.
This last-minute filing of expense claims increases the finance team’s burden tremendously. First, they have to chase employees to file on time. Once the expenses are filed, the finance team has to match each claim with the corresponding receipt & validate expenses, ensure they are duly approved, lie within the policy, and then reimburse accordingly within a stipulated period.
It is a lot of work, no matter how efficient your finance and accounting teams are. Not to forget the multiple back-and-forth emails with employees asking for any clarification if needed.
A good expense management software simplifies expense filing. On one hand, it enables finance teams to send notifications and smart nudges to employees asking for timely expense filing. On the other hand, it lets employees file expenses on the go via its mobile app. Moreover, some expense software solutions also enable the finance team to process claims and reimburse with a single click using ACH payment.
As the automated expense management system ensures complex policy compliance, follows government tax regulations, and contains all the information on one platform, it frees up the finance team’s bandwidth to focus on business-critical activities.
Here is a quick feature checklist of expense management software to ensure faster expense filing:
One of the most significant benefits of using expense management software is its ability to analyze hundreds of expense data points to identify trends and spot wasteful spending.
Automated expense management enables real-time visibility of spending as and when it happens, allowing the finance team to manage the allocated budget more efficiently.
The centralized visibility into expense data and plug-and-play dashboards let CFOs, finance leaders, and decision-makers analyze expense data in various ways helping them forecast expenses and allocate future budgets accordingly.
Here is a quick feature checklist of expense management software that provides you data insights into your expenses helping you make informed decisions,
With improved visibility on the expense data, your finance teams can identify where wasteful spending is happening and mitigate cost leakages. Moreover, the team can bring the needed process change by identifying bottlenecks in existing policies and workflow.
Going overboard with expenses can have a significant impact on the company’s financial bottom lines. So, you need to implement a pre-spend approval mechanism to keep costs in control.
In a pre-spend expense approval system, a specific dollar amount of expenses are approved by the managers before employees incur them. This helps cut out unnecessary expenditures by enhancing policy compliance and reducing the chances of expense fraud.
However, merely creating a pre-spend approval process is not enough to save costs. You must also empower your managers to approve or reject any out-of-policy claims easily. This is where automated expense management comes into play.
By managing your expenses through advanced software, you can get features like expense policy creation, approval flow customization, and an audit trail of expenses. These features make the implementation of the pre-spend approval matrix easier helping you cut unnecessary expenditures and save costs.
Managing expenses manually involves extensive use of a spreadsheet to store all the expense data. However, a significant problem with this method appears while data sharing.
When your finance team wants to transfer the expense data into the ERP software for better tracking, they have to do it manually because spreadsheets do not integrate with any other systems. Manual data transfer leaves a broad scope for errors and requires a lot of time.
However, with automated expense management, you can avoid data-sharing obstructions. Most modern expense management software offers seamless integrations with other software like ERPs and HRMS. Such integrations enable seamless data flow across systems, thus eliminating errors and saving time.
The bottom line is- automated expense management is a win-win for all. The employees get faster and more convenient filing, stakeholders responsible for approvals get automated reminders for quick approvals, and finance teams get audit-ready reports, better data visibility, and greater cost savings.
As a leading all-in-one expense and travel management solution, ITILITE has all the necessary features that streamline your expense management process and provide intelligent insights for your finance and leadership teams.
With ITILITE’s integrated travel and expense solution, your finance teams can,
The automated expense solution will undoubtedly make your finance team’s life more comfortable while driving efficiency in your expense reimbursement process, guarantee policy compliance, and enable cost control.
To know more about how ITILITE can help your finance team, book a free demo with our product specialists today!
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