Some businesses are stuck in their current expense management process because they worry about the cost of change– particularly the cost of new software and the expenses of managing the transition.
However, the benefits of automating expense management far outweigh its costs for your business. Your company can improve its productivity and better manage the second largest controllable cost—employee business expenses.
This article will discuss how expense management automation works and how it can help your business become more efficient in its finances.
What is Expense Management Automation?
Expense management automation is the strategy of using technology to streamline the expense management process—recording, monitoring, approving, and paying for reimbursable employee expenses. The technology incorporates expense management software to aid in processing reimbursement claims with minimal human effort and manual data entry.
Why is Expense Management Necessary?
An expense management system enables your finance teams to monitor and control when and how funds leave the organisation. Managing expenses could be problematic without this system. The process should cover procedures for filing, verifying, approving, and paying expense reimbursements.
All members of your organisation must take responsibility for managing expenses. As such, making the process easy for all involved is crucial. Here lies the difference between traditional and automated expense management.
A traditional or manual expense management process entails a lot of time, effort, and resources. By contrast, an automated expense management system organises your business finances more efficiently. The result? You won’t over or underestimate your budget.
You will also have control and visibility over employee spending, enabling you to derive accurate cash flow data for better forecasting and financial planning.
Now, let’s dig deeper into the business benefits of expense management automation.
5 Business Benefits of Expense Management Automation
Leveraging automation goes a long way for any business, big or small. Here are some benefits you can get from expense management automation.
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Eliminates errors caused by manual reporting
Manually reporting expenses can result in costly errors. The repetitive work can overwhelm your employees, especially if they process multiple reimbursement claims. Automating the process can eliminate high-cost mistakes and increase your employees’ efficiency.
For instance, expense automation software can enable employees to submit receipt photos from their smartphones for the finance team to compile and process. This functionality allows for faster claims processing while reducing human errors.
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Enables faster approval and reimbursement
Manual expense reporting involves a lengthy process since the finance department must thoroughly verify the information contained in each claim. This tedious task often delays approval and reimbursement. Expense management automation addresses this problem by automatically sending the claim report to the next approver after verification.
Employees can also send their claims even if they’re still on a trip. This advantage allows the finance team to start the process ahead without waiting for the employee’s return.
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Reduces risk of expense fraud
Double entries concerning duplicate receipts can easily pass through the manual expense reporting process. An expense management system eliminates this risk by flagging identical information and notifying the sender and the approvers. This feature reduces the chances of fraudulent submissions from employees.
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Better spending visibility
Another benefit of expense management automation is that it provides real-time spending data and visibility. You can use this information to create accurate forecasts and budget allocation. The tool also guides your finance team in developing actionable ways to improve business profitability.
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Improves expense policy compliance
Expense management software like Spenmo can help facilitate your organisation’s expense policy compliance. Specifically, automation makes it easy for the accounting department to organise financial records throughout the year and prepare them promptly for financial audits and tax reporting.
Manage Company Spending with Automation Software
Expense management automation offers multiple business benefits. This strategy enables faster approval and reimbursement, eliminates the risk of expense fraud, and helps enhance expense policy compliance, among others.
Streamline your company’s expense management process with Spenmo. This platform consolidates internal spending, automated bill payments, approval workflows, and accounting reconciliation into an integrated view. Talk to us to learn more about our all-in-one software today!