With each sale comes a wide variety of costs that are attributed and associated with it. Those costs include travel, marketing materials, meetings, processing and other operating costs. One of the biggest expenditures is employee expenses; noted as the second largest controllable expense by both PayStream and Aberdeen Research.
Inefficiencies throughout the expense management process leads to lower margins for the organization as a whole, less time sales people have to actually sell and more headaches for individuals throughout the organization as a whole.
To help you understand ways to improve how your organization manages expenses, we would like to highlight 3 expense management weaknesses that a manual expense management process might present, affecting everyone from the sales traveler to the CFO.
1. Unenforceable Policies
Lack of compliance and poor visibility all begin with issues in your corporate policy. 41% of respondents to a recent Aberdeen survey reported poor visibility into T&E spending, compliance, and suppliers, and another 37% reported lack of control over T&E spending. A straightforward policy is essential and should include these four points:
- Well-Defined Expense Guidelines
- Distinct Timeframes
- Easy-to-Follow Reporting Procedures
- Straightforward Communications
For more information on how to make these work for your organization, see 4 must-haves for a winning expense report policy.
2. Processing Costs
Additional concerns of the respondents to the Aberdeen study were ‘reduction in processing costs (35%)’ and ‘eliminating manual- and paper-based processes’ (30%).
Common concerns for organizations, with answers to each inherently tied: Automation and Mobility.
Automation will help reduce costs by reducing work for administrators, minimizing the amount of policy uncertainty for travelers and allowing your organization to have improved internal customer service. For more, see the Nexonia article, 3 reasons to automate your expense reporting process.
Mobility on the other hand provides a path to automation for your organization, allowing for reduction in administrative workload for both the traveler, who, with an expense app, can upload his or her receipts by phone. Administrators also benefit from mobility, as they can receive documented receipts and reports without having to sift through piles of paper. For more information, see 3 reasons to go mobile with your expense reporting.
3. Costs of (Lacking) Integration
Even if you have developed a perfect policy, automated the employee expense reporting process and worked to cut paper-based processes from your vocabulary, you could potentially be wasting money if your processes lack integration with your accounting system. For instance, an employee may have submitted his or her expense report and that report has been documented and approved, but what’s the next step? Manual data entry?
For many organizations, this means a complex process to bring expense data into your ERP, resulting in wasted time and higher costs. Companies that are making the most of their expense management are turning toward effective, automatic and simplified system integrations.
Top organizations that can integrate their expense management with other platforms gain visibility into the big picture of spending, creating an “operational nexus” for project management, accounting and expense reporting. For more information, download the whitepaper: Key Considerations for Selecting Expense Management Software.
Solving Policy, Processing, and Integration Concerns: Nexonia Expenses
If you are looking to simplify the entire process of employee expense reporting—the submission, approval, reimbursement, and the accounting for all of this—learn more about Nexonia Expenses: a user-friendly expense app that will help your organization save time and money, gain visibility into spending and much more.