Expense automation: Tracking, systems, reporting and workflows
Automated expense reporting is an easy sell for any modern business. With benefits like improved productivity, error-free processes and better spend visibility, everybody wins. But before you invest in expense automation, it pays to do your research. You’ll want to better understand how these systems can complement each of your business’ internal processes to make your case. So, what exactly is an automated expense system? How do you automate your corporate expense workflow? And can expense management automation really help grow your business and protect your bottom line at the same time?
Here’s everything you need to know.
What is expense automation?
Expense automation is the use of accounting software to streamline the process of tracking business spending and employee expenses.
Whether it’s booking flights, hotels and taxis for business travel, taking clients out for dinner, coffee or drinks, or simply buying consumables for the office, business expenses can add up quickly. And with the whole team spending money on the go and all at once, it can be hard to track and manage every single line item.
Rather than relying on paper receipts, spreadsheets and other time-consuming manual processes, automated expense management systems let business leaders and finance teams access real-time expense data. These insights help streamline company spending, eliminate expense fraud and identify areas for cost savings. No more back-and-forth to chase up those receipts.
Does automated expense management save time?
The short answer to this question is a resounding “Yes”. But expense management automation doesn’t just save hours and hours of manual data entry for accounts payable departments or finance teams. With the right expense management software, your CFO can automate the employee expense approval process, regulate travel expenses on business trips, track cash flow, monitor corporate card spending and so much more. Plus, your employees won’t have manually claim each of their expenses and can get back to pretty much anything.
By choosing to automate your expense reporting process, you can streamline your expense management, save time and hassle for accounts payable, reduce business expenses and even increase your profits.
Why and how should businesses track their expenses?
Tracking expenses is a crucial part of any business’ spend management program. If you aren’t tracking what you — or your employees — are spending, you could be in for some nasty surprises when it’s too late to do anything about it.
For example, forking out thousands of dollars in reimbursement for taxi rides and team lunches you weren’t even aware of isn’t a great way to stay on top of your finances. But it’s hard to avoid when you don’t have a robust system in place to track these expenses.
$50 a month for taxis might not seem like much for one employee. But if you have 200 employees doing the same thing, that’s $10,000 a month. And with a clunky, manual expense reporting system to battle with, many employees might put off submitting their expenses for weeks (or even months). Before you know it, you could be facing $60,000 worth of employee reimbursements you weren’t anticipating.
Tracking your expenses regularly and thoroughly is vital for getting an accurate picture of your financial position.
Manual vs automated expense reporting
It may be tempting to try and cut corners in the short term with manual expense reporting, but don’t be surprised when it costs your business in the long run. Manual expense management requires data input and is subject to human error, whereas automated expense management software limits manual intervention and continuously actions workflows on your behalf. The money you invest in an automated system will help keep you saving for years to come. Whether it’s streamlining operations, saving countless hours of admin, reducing outgoing costs or ensuring expense policy compliance.
How to improve expense management
The first step in gaining control over your business’ spending is to have a firm expense policy in place. From your CFO right down to your junior staff members, everyone should be absolutely clear as to what kind of spending is acceptable.
For example, are employees authorised to travel by Business Class on flights or are they limited to Premium Economy? Does the company cover mileage to and from the office or only for off-site travel? Each organisation will have a different set of rules and priorities, so whatever you decide is right for your business should be clearly communicated in an official company expense policy.
Your expense policy should also clearly outline the process for submitting expense claims and all staff should fully understand the approval process. All employees should be familiar with the various spend categories and how to code these in their expense claims.
Some things to consider outlining in your corporate expense policy include:
- What types of transport are acceptable
- Budget limitations for client entertainment
- Mileage allowance
- Details of any items which cannot be submitted as an expense
- Time limits and deadlines for submitting expense claims
- The chain of command for expense approvals
Making sure that your entire organisation understands the system in place for expense reimbursements is essential for ensuring compliance and avoiding unnecessary or out-of-policy spending. Having a clear approval process in place also ensures that your employees submit their claims with all the necessary information, ensuring that your accounts team doesn’t have to waste time trying to follow up on each claim.
Sounds hard to enforce? Preventative spend controls can help you avoid awkward expense conversations altogether. Try looking for a solution that lets you set and enforce spend rules automatically, like weekly or monthly spending caps, in-policy spending categories (i.e. taxi, office supplies) and even select vendors and merchants.
What systems should businesses use for expense automation?
Choosing a scalable expense management system will save you time and money in the short term and allow you to adapt the system as your company grows and changes.
The right expense management solution should stand the test of time. Rather than selecting software with one capability that matches your current needs, take some time to consider how you could automate other aspects of your accounting and expense management now and in future.
When choosing an automated expense management tool, keep an eye out for these features:
- Real-time visibility and notifications
- Integration capability with your accounting system
- A virtual corporate card offering
- Automatic coding for spending categories
- Budget controlling capabilities
- Automatic bill payments
- Digital receipts
- Mobile app for ease of use
A robust and innovative automated expense management system could transform your business operations. So it’s important not to rush into an investment that won’t carry its weight in the future.
How do automated expense systems aid expense reporting?
Expense reports come in all forms. They can be used by individual departments, for specific projects and for overall company spending. From identifying tax-deductible spending to tracking departmental budgets, expense reports give you the information you need to control spending and plan ahead.
When used well, expense reports can identify areas to reduce costs and increase profits. But many businesses struggle to implement an expense reporting system that delivers actionable insights.
An automated expense system can ensure all company spending is tracked accurately. When paired with a holistic spend management solution, an automated expense report gives you the real-time insights you need to gain better control over company spending.
Sure, you can use an Excel template to create a simple expense report. But with automated reporting, you can reduce human error, increase accuracy and save countless hours of manual labour (ultimately saving your business money). And, with real-time visibility, you can eliminate unnecessary spending by intervening before your team exceeds their budget.
How can businesses automate their expense workflows?
Automating expense workflows doesn’t have to be complicated or time-consuming. Once you’ve set up your system, most of the work is done on your behalf and you could save up to 90% of your current admin time spent producing an expense report.
Some things to consider when automating your expense workflows:
- Customise report settings to suit your business’ specific needs
- Set up automatic reminders so you don’t have to follow up with stakeholders each time
- Build custom categories for vendors and merchants for streamlined future reports
- Enable automatic coding from credit card data
- Make uploading expenses easier with photo receipts
- Make sure your expense automation software is integrated with your accounting system
- Make sure all transactions and claims are visible in real-time
- Consider setting up automatic bill payments to avoid late fees and limit admin time
- Consider enabling automatic staff reimbursements
- Consider virtual company expense cards to reduce the need for reimbursement
What are the benefits of expense automation for businesses?
From senior management to entry-level employees, expense automation benefits people at all levels of an organisation.
Automated expensing saves time
It’s no secret that empowering employees to upload photo receipts or use virtual company cards saves a great deal of time: time that could be better spent working on your business.
But that’s not all. Automated systems with spend rules in place help line managers claw back valuable time managing pre-approved expenses. With automatic expense categorisation for things like tax and merchant information, automated expense systems can reduce (and sometimes eliminate) the need for approvals.
Automated expense management saves money
Time really is money. And automated expense management helps save both. It can turn countless hours of manual data entry and expense tracking into one automated, actionable, proactive spend management solution.
But the cost-saving perks of expense automation aren’t just about person-hours. It’s also about giving CFOs and managers the ability to track and monitor expenses as they happen. This kind of continuous transparency can allow decision-makers to control company spending and identify areas for cost savings.
Expense automation boosts morale
It may not be as eye-catching as bean bag chairs and a ping pong table in the middle of the office, but allowing employees to receive faster reimbursements for far less effort is a surefire way to win them over. Not to mention the sense of empowerment your employees will feel from having more autonomy over their purchasing decisions.
H3: Automated expenses improve compliance
Effective policy and compliance management help finance teams mitigate business risks. That’s why using automated expense software is so important. It can centrally track and manage your company standards, policies and internal controls. Automated expense management can help define and maintain any rules and workflows, and managers can approve their employees’ spending to help stay in compliance and on budget.
Automated expense reports make life easier
There are some major benefits to automated expense management. But at the end of the day, the most important one is that it just makes life easier. By eliminating the paper trail and performing automatic workflows, expense reporting and tracking is a walk in the park. Need we say more?
Automate your business’ expense management process with DiviPay.
DiviPay’s award-winning technology can get your business on the front foot by streamlining every step of your expense management process. Our software is here to make life easier, from automatic coding and photo receipts to customisable reports and automatic reminders.
Our features include:
- Automated expense management
- Real-time transaction feeds
- Automatic bill payments
- Quick and simply expense reimbursements
- Instant virtual corporate cards with controls and budgeting capabilities
- Accounting integrations
- Custom workflows
Learn how automating expense management can get your team on the right track from the get-go, and book a personalised demo with DiviPay today.
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