Many businesses overlook expense management as a way to improve their Return On Investment (ROI) and profitability. Corporate travel and entertainment (T&E) is the second-largest controllable expense for businesses after employee payroll and benefits. Travel expenses should not be maintained using paper records, crumpled receipts, or simple spreadsheets because they account for such a large portion of a company's financial outflow. Companies can save time, improve accuracy, and reduce the amount of time to reimburse employees for their expenses by streamlining the expense management process.
Expense Management Automation: Basics
Expense management automation allows businesses to automate the workflow of recording, tracking, approving, and paying expensed amount spent by their employees. The software also ensures that the firm isn't spending more money on approved—or unapproved—expense areas by following the company's expense management policy. Expense management automation also entails the use of analytical tools to help firms make better spending decisions and maintain compliance and accountability by tracking and reporting all expenses accurately.
The Need for Automate Expense Management:
Manual expense management necessitates a great deal of paper and spreadsheets, which can be inefficient, time-consuming, and error-prone. According to a report publised by the Global Business Travel Association (GBTA), the average cost of processing one expense report is $58.
According to the GBTA, companies process an average of 51,000 expense reports per year, resulting in a cost of $2,650,000. According to the association, 19% of those reports contain errors, costing an additional $562,000 and 3,000 hours to correct.
Advantages of an Automated Expense Management system:
Here are some ways that automating the manual expense system can help firms in managing their travel expenses:
- Eliminates paperwork and error-ridden reports: When a company has an expense management system in place, employees can use their mobile phones to capture receipts and submit them directly to the expense application, which eliminates paperwork and error-prone reports. This saves a lot of time for your employees and eliminates potential sources of error.
- Improves policy compliance rates: Companies can customise their expense management system to match their travel policies, which improves policy compliance rates. This system is set up to be able to detect and flag expenses that violate the travel policy automatically. Policy violations would be reported to the approvers as soon as they occurred.
- Prevents expense fraud: Automating expense management processes is a simple way to stop expense fraud. When the same expense is submitted twice, automation can detect duplicate entries and send a notification to the submitter (and their approver) to merge or delete the expense. Firms can also increase transparency by enabling a double-checking process with customised workflows.
- Speeds up approval and reimbursement: By using an expense management system and customising approval workflows, businesses can reduce manual intervention. This will make the reimbursement process go more quickly and smoothly.
- Increases Visibility: The majority of expense management systems provide detailed reports on expenses, trips, policy violations, reimbursements, and much more. Visibility and traceability are greatly improved as a result of this.
Conclusion: TrackEx is a cloud-based travel and expense management software for businesses that makes it simple for employees to plan work-related travel and keeps track of expenditures, users and roles, accounting, audits, and compliance through well-structured reports and real-time data. Businesses can use this to address issues like travel expense management, visibility, and the risk of making poor spending decisions, especially when business travellers' attitudes have changed significantly.
By associating with TrackEx, you may save up to 30% on your travel costs. Sign up for a free trial now.