Why Electronic Expense Reporting Should be the New Norm
Electronic expense reporting is now all but replacing the old-fashioned paper-driven expense reporting system that has been in place for centuries, creating the new norm when it comes to business expense management. And even that has a new name—spend management, and there is no comparison.
The benefits of going electronic
Without an electronic approval system in place, accounting staff is probably wasting much of their time questioning and categorizing transactions or traipsing around the office trying to track down managers for approvals.
One benefit of using an automated system is that one can actually see what is happening in real time or before the spending occurs. By using the spend management reports (instead of waiting for post-transaction reporting on what occurred), it helps keep budgets on track throughout the year.
When a company has an electronic expense reporting system in place, business owners can hone in on areas where they can cut their expenditures. For instance, there’s configurable policy enforcement such as tolerance levels and limits with red flags for going over budget or under budget. Also, companies can save money by importing catalogues from their own custom vendors for office supplies and such, enabling vendor discounts to apply.
Most companies find that the electronic expense reporting process provides new levels of management accountability and reporting. Department managers enjoy getting budget imports for “budget versus actual” spending data, plus there is a historical audit trail. There is an easy-to-use knowledge base and video training library for users, too.
An added bonus
One interesting fact about online expense reporting is that it can actually help your company thwart employee theft. Employees have been proven to remain more honest when the expense reporting process is online as it sets the right tone to foster more ethical behavior and doing away with the temptation for fiddling expenses. You can establish clear expense policies for all employees to view online.
Certain features like visual policy cues and the like have been designed for employees or expense submitters so that they know if they are about to go out of policy—that is to say, submit an expense that is too high or one that the company will not reimburse. There are also policy flags for those who approve expense reports, alerting them when a report they are in the process of approving is out of sync with the company policy.
Lastly, automation enables your company’s accounting team to facilitate expense report reimbursements efficiently. The accounting department can review and make final changes with access to reports, attachments and prior approvals. Some systems even allow approvers to use a mobile app or go online to review or approve expense reports, and they can reimburse employees via ACH, payroll, or credit card statement reconciliation. Finally, there’s accrual reporting integration between current systems, payment providers, and visibility.
Expense reimbursement made easy
While most employees look forward to receiving expense reimbursements, few are thrilled by the process necessary to get the check. It is not as if their bosses and finance departments like it any more than the employees do. Expenses reports are the bane of many workers’ existence, often leaving the company and it’s employees with the feeling that someone is being ripped off.
Thankfully, online expense reporting providers make the process easier. Employees can simply use the company’s website and mobile app to document expenses as they accrue and later submit the report online for reimbursement which can be done anywhere, anytime. There is also the ability to take pictures of receipts and attach them to expense reports. This saves time for the employee, approvers, reviewers, and managers. It also puts an end to the acres of filing cabinets used to store completed reports.
Online expense reporting also solves the addition/subtraction problems that sometimes bog users of paper-based expense systems. Employees simply add the expenses but do not have to add the expenses up, as the totals and even the categories are done automatically.
Again, automation also implements company rules, preventing employees from entering out-of-policy expenses. This ensures compliance but also reduces the potential for conflict between employees and their managers or finance departments. The workflow by transferring the report from employee to approver to payment is also automated. This reduces the possibility that an expense report will sit idle in somebody’s inbox and be forgotten while awaiting approval.
Another perk of automation is that it allows employees to enter expenses as they are encountered. If employees do that at the end of each day, the expense report will be submitted as soon as travel is completed. This gives the company a better handle on expenses as they are being accrued, resulting in fewer surprises when many employees turn in delayed expense reports and budgets.
The online expense reporting system can also be tied to travel purchasing, including links to reservations systems that assure companies receive their negotiated discounts. These savings can have a large impact on the bottom line for business travel.
For employees still tethered to paper expense reports, online expense reporting software and systems can improve productivity, increase accuracy, and make both employees and managers happier. The ubiquity of smartphones makes reporting a “do anywhere, do anytime” task, and this convenience is an excellent reason to invest in the expenses report technology.
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