Expense management has been viewed as a necessary evil at best for accountants. Employees waste time stapling receipts and running around confirming this or that expense and employers waste time on the tedious process of expense reconciliation and processing reimbursements. Furthermore, keeping expense management under control is challenging for growing businesses, who may then respond by imposing stricter controls on travel and entertainment expenses. This only lowers employee morale and means more resources are spent dealing with expense management.
A better, more modern approach is out there. Instead of writing expense reports on Microsoft Excel, employers should be looking at the cloud and automation to create a faster and more mobile approach. Companies need to understand what upgrades exist, the benefits of upgrading, and how to implement new technologies smoothly.
Problems with the Old Ways
The old method of expense reporting has never been pleasant, but changing market and workplace conditions means that sticking to those ways has become untenable for several reasons.
For starters, businesses will look at the costs written down on an expense report and consider how to bring those costs down, but they often never consider the costs of the expense report itself. According to a 2015 study from the Global Business Travel Association, the average cost to process an expense report for a single night hotel stay is $58, with additional expenses if the report must be corrected. Multiply that $58 by 20 or 200, and you are looking at a substantial business expense.
And while the old methods may have worked fine in the past, changing conditions in the office and the general economy makes them more untenable. Employees are flying and using expense reports more, which means that they are spending more time filing expense reports instead of actually doing their job. And from a business end, companies no longer have free money to toss around on the best SEO company and are constantly looking to keep their travel and entertainment budgets under control. The right technology can fix all of these problems.
How can new technology streamline and improve the expense reporting process? The answer can be found in automation and the cloud, two technologies which have already been used to help businesses in plenty of other areas.
Cloud technology, such as Invoice Home, which has invoice and receipt templates, offers a centralized, yet mobile approach to expense reporting which insures that employees, employers, and accountants are all on the same page. Employees can access the cloud based system from anywhere with a connection, letting them note expenses immediately instead of having to store a receipt until they get back in the office.
Of course with automation platforms, employees may not have to manually keep track of their expense reports to begin with. The automation process can begin the second an employee pays for a hotel or flight, which lets things move faster.
Furthermore, automation platforms are programmed to comply with government expense reporting policies to prevent expense report fraud, a serious problem which can cost small businesses over $30,000 per year according to ExpensePoint. If an employee files for an expense which will not be accepted, the automation platform can block it immediately instead of giving the employee a nasty surprise much later when the paper process is completed and they receive the rejection notice after the trip.
Automation and cloud technology are just two examples of how expense reports can be adopted to the modern age, and the result is a quick process which prevents confusion and fraud.
Implementing Technology in the Workplace
Despite the benefits of new technologies, companies have stuck to the traditional system of Excel and paper receipts because it is how they and their employees are used to doing things at this point. This resistance to change cannot be simply brushed aside.
There is a wide variety of expense reporting software out there as PC Magazine demonstrates, each with their various advantages and disadvantages. But when promoting this technology, accountants must make sure that it is as intuitive to use as possible both for themselves and employees. Accountants need to be able to make adjustments such as modifying company expense report compliance policies, while employees need to be able to use it with only minimal training.
The goal behind digitizing and modernizing expense reports is to ensure that everything is accurately and quickly quantified. The rise of Big Data and automation has already quantified business areas which no one could have thought would be centrally monitored. There is no reason the same cannot be done with expense reports, and a centralized database will reduce fraud, improve employee satisfaction, help companies save money, and let accountants process expense reports faster and focus on more creative work. The result is a win-win scenario, if a serious effort to implement new technology is done.
Cost accountant with major focus in SAP/General Fund Enterprise Business System (GFEBS). Also, main functional inspector for accounting/finance audits for internal reviews as well as the Statement of Budgetary Resources audit initiative.