How automated expense reporting can make finance teams more efficient
The first image that comes to mind when thinking about expense management systems is the harried business traveller who has to keep hundreds of receipts, and manually type in the details of each one into an Excel spreadsheet.
The first image that comes to mind when thinking about expense management systems is the harried business traveller who has to keep hundreds of receipts, and manually types in the details of each one into an Excel spreadsheet.
Not exactly what you would call a fun time.
With modern expense management software equipped with automated reporting, employees simply have to snap pictures of their receipts, upload them to the expense app, and the platform automatically takes care of everything else.
But for all the ease-of-use and time-saving benefits of automated expense reporting for end-users, these are simply dwarfed by the impact such systems have on finance teams.
From streamlined approval and reimbursement processes to complying with expense policies and regulations, the biggest benefits of expense reporting automation happens behind the scenes.
The problem with manual T&E reporting
In many small businesses, travel and expense (T&E) reports are handled manually at the end of each month.
Employees take down their travel and/or work expenses, along with the corresponding codes or labels of each expense, and submit their lists (usually in paper or spreadsheet format) and receipts to the finance manager for approval. For tax and regulatory matters, a bookkeeper or accountant may have to be looped in.
While this process appears to work just fine, it’s actually inefficient. There’s a lot of manual handling that takes time, which, in turn, costs money.
In contrast, a report by CFO Innovation shows that fully automated T&E systems are capable of reducing the cost of processing expense items by as much as 30 per cent. In addition, nearly half of respondents in the report said they were able to generate savings from T&E management by 10 per cent.
Below, we take a closer look at how automated expense reporting can make finance teams more efficient and save money as a result.
Automated data flows and insights 📉
One of the chief benefits of automated expense report solutions is their ability to quickly integrate with your organisation’s internal systems. This means that data flows between internal processes happens automatically. For your finance professionals, this means saying goodbye to manually transferring bookkeeping entries from Excel spreadsheets into the accounting system.
In turn, this seamless integration with your internal finance processes allows automated expense report solutions to generate custom reports, giving your finance team robust data and complete visibility on employee spending. An intelligent tool gives you the complete picture of your financials, allowing you to access key insights such as the number of T&E disbursements per FTE, cycle time in days to approve and release T&E reimbursements, and the total cost of performing the expense reimbursement process.
Setting up expense reports for success 🧾
According to a study by the Global Business Travel Association (GBTA), 19 per cent of expense reports have errors or missing information. What’s more, these mistakes take 18 minutes to fix.
By automating your expense reporting processes, you can help employees create complete and compliant expense reports that are ready for approval. This reduces the amount of time accounting has to spend reviewing each report, sniffing out mistakes, and making corrections if necessary. This can be done in two ways.
First, expense management systems can be integrated with your company’s travel policy and expense policy to automatically populate and categorise expense items—this cuts down on the likelihood of misattributed expenses.
Second, automation can prevent inaccurate reports by guiding employees as they fill out their expense reports, displaying rules and guidelines for each step of the process. This ensures your expense policies, including receipt guidelines, per diem limits, and reimbursement limits, are visible rather than being stuck in a document hidden in a filing cabinet somewhere.
Faster reimbursements of employee expenses ⚡️
Automated reporting systems can also remove (or at the very least limit) human review from the reporting process. This can expedite reimbursement times, bringing them down from weeks to as little as a few days—according to one report, reimbursement times for manual reporting take over 7 days for 48 per cent of businesses.
Automation addresses this by doing much of the heavy lifting on two fronts.
First, with the app doing most of the work of automatically reviewing expense reports before they’re sent to the human approvers, you no longer need a small team of accounting staff pouring over each report before getting a manager to sign off.
You can even consider self-approvals for reports under a specific limit, which go straight to accounting without manager approval, speeding up the reimbursement process. Again, the app does most of the reviewing work for you, allowing you to use human resources sparingly.
Automation can also serve as a backstop for high-risk reports, helping accounting teams conduct audits only when necessary. This brings us to the next point.
Better fraud detection 🔍
It’s estimated that the global cost of fraud now tops a little over US$2.9 trillion. Part of that number comes from businesses around the world that lose around 5 per cent of their annual revenue to workplace fraud.
Much of this can be avoided by automating expense reporting rules that reduce the potential for false, inflated, or duplicated expense items to be sent to your finance team for approval.
For example, expense management systems can be integrated with your corporate travel policy to flag questionable expense items for auditing—think personal meals by business travellers passed off as a “business lunch” in the report.
This can be done by configuring your policy compliance guidelines into your tool, which can then automatically check off audit items and assigning a score to an expense report. Submissions with high scores can be reimbursed right away while only those with low-score reports warrant human attention.
Automated expense reporting can even use artificial intelligence to detect whether a receipt has been previously submitted or matches items on the corporate card statement.
Automated expense reporting is a win-win for everyone
Bottom line? Traditional expense reporting and management processes aren’t just annoying for employees and business travellers, they’re also a pain for finance and accounting teams in charge of processing expense reports.
These are the people who have to process employees’ reports, review each record, and chase down staff for missing or inaccurate information. When these reports are created and submitted manually, the likelihood of honest mistakes is high. As a GBTA report notes, 1 in 5 expense reports has to be reviewed because of missing information or errors.
Integrated expense management tools with automated reporting can be a godsend in this area, saving finance teams from having to spend hours on meaningless details—that’s time they could have spent growing your business instead. The last thing they need is to have to track down John just to check if his soy latte was actually a legit purchase.
💡 Friendly reminder: Travelstop expenses can be used as a stand-alone expense management solution. If you would like to digitise your expense workflow, let us know. We're free to use for a limited period.