A business expense can be divided into fixed and operational costs or necessary expenses. These necessary or operational expenses can include travel and entertainment costs, and administrative costs that are sustained by employees working in an organization. In some cases, few organizations offer funds for corporate spend in advance. Whereas, in other cases, employees have to bear these costs which later gets reimbursed by the company. Such kind of physical reimbursement procedure can prove to be unproductive and burdensome both for the employees as well as for the entire business.
Reimbursement as a Painful Process for Businesses
1. Poor Visibility
Businesses tend to struggle a lot to search for the actual expense of operational costs in time with the manual processes. These amounts can differ due to some particular factors for which businesses are unable to predict, monitor, and control the operational costs unless they are made on the company’s behalf.
2. Higher Processing Costs
The processing cost of reimbursement does not only include paper expenses. It also consists of the time spent by the finance department to confirm and resolve the cost is also a cost that an organization giving reimbursements has to bear. According to a study of 2016 by PayStream, the average expense of physical reimbursement is about $26 per report.
3. Expense Policy Violations
Today, many businesses implement travel and expense policies, but monitoring those policies is a daunting task in big companies as it is followed by a trail of papers and spreadsheets based on the expense management process. The finance department has to work very hard and need to handle several expense reports from employees falling into various hierarchies where diverse travel and expense policies may be appropriate.
Why Reimbursement is a Pain for the Employees
Employees need to struggle a lot with no transparency when it comes to their expenses as well as reimbursements. They are unable to figure out whether they can make any expense on their company’s behalf. Hence, there is no transparency and the reimbursement process may get delayed. After completion of the reimbursement process, they will not know why their expense was rejected, thus making them to forcefully follow up with the finance department for several times.
Expense Reporting is Difficult
The expense reporting process for corporate expenses can be burdensome for many employees as they have to take out important time from their work schedule for filing expense reports. Along with it they must also gather expense receipts, file up expense details in spreadsheets or paper and submit the reports through an email or manually.
Delayed Reimbursement Cycle
On average, a traveler’s 12 to 15% salary gets stuck in expense and reimbursement cycle. Late reimbursement or any kind of improbability can turn out to be extremely hectic for these employees.
How Expense Automation Helps
Manual expense reports leave a lot of paper trails. Starting from vouchers, paper receipts, and excel spreadsheets, finance managers need to check a plethora of expense reports for approval, confirm and reimburse corporate expenses. With the help of automating expense reporting, all things take place digitally and therefore needs no more paperwork in the whole process. It becomes extremely easier to process and view and businesses can save stationary expenses by switching to an automated expense management solution.
Leveraging an automated expense management system has proved to be the best way to reduce expenses without even the need to compromise. Organizations that deploy expense automation have witnessed 6 to 17% savings on annual spends. Automation helps in compliance and productivity and also provides organizations to view real-time data that will surely help them to plan in the future.
Expense Reporting Made Easy
Manual expense reporting is quite challenging, and employees tend to keep it aside until the last moment. While automating expense management, digital expenses can be automatically reported whereas cash expenses can be reported in a few seconds. All these expense reports can be made on the fly. There is no need for the employees to take out time from their work and report expenses. They can report accurately and quite often via automation.
To Sum Up
Manual expense management process is a thing of the past and today many organizations have realized that they are not receiving the full benefits without automating expense management. An automated expense management process can really be useful for a business to minimize expenses and cut down policy violations.