In the competitive business world, you rely on your sales workforce to help increase revenue. The main role of sales after all is to improve the conversion of prospects generated by your marketing campaigns. This conversion results in improved profitability as you get an ROI on your sales and marketing strategies. This is why you invest in ensuring that your sales reps are given the right support and opportunities to close sales. Their success means growth for the company.
There are different kinds of sales approach that companies use. Some have in-house sales reps while others have representatives who operate out of the office. They go out to meet with prospects to offer and recommend products or services. These trips while generating revenue also incur costs. If you use the same sales approach, then you know how crucial it is for you to be able to balance the costs in relation to your sales team’s performance. In order to do so, you will need an effective expense management system.
What Is an Expense Management System?
AscendCFO, a business solutions provider, defines it as the process of managing costs that a company incurs while doing business. The money spent on business trips that your sales team goes on is one of these costs. This includes airplane tickets, hotel accommodations and meals. An efficient expense management system reduces the risks of employees turning business trips into an all expense paid vacation. It allows companies to have a visual on how funds are spent by analyzing the data that sales reps include in their expense reports.
Companies use different methods to manage their expenses. According to a study done by the Global Business Travel Association or GBTA cited on Finextra Research’s website, most companies still use traditional methods. This often involves spreadsheets where information needs to be manually entered. While there are companies who have transitioned to a more modern method, these are rarely updated. So, these companies end up using software that is already outdated.
With the onset of more developers creating software to address this business need, there are now more systems or tools available to choose from. If you’re just starting out with using an automated system, you can take advantage of expense management software free downloads that come with basic features. However, if you want a system that’s more sophisticated and detailed, you can opt to purchase expense management software from any of the leading developers.
You will need to do some research before making that choice. You can use reviews of expense management software available online to get the information you need. Finding out how other users fare in using the system will be helpful for you to decide the right fit.
Importance of Efficient Expense Management
The system used by your company is a key factor in managing expenses efficiently. If you choose one that is too technical, filing an expense report may be too tedious thus discouraging your sales workforce from completing it accurately. However, if it is too generic, you might not get the information you need to be able to analyze data effectively. But why is it important for you to have this information? How important is it for you to have an efficient system in managing your sales workforce’s expenses?
- Improved Sales Strategies – According to com, it is vital that you take into account the profitability of a deal when assigning sales resources. While the current trend is for companies to focus on the gross margin without considering growth and opportunity. A large order that happens once may seem like a big payday so you may end up overlooking smaller orders that happen on a regular basis. You can confirm how profitable these deals are by analyzing the costs involved. With this data, you can adjust your strategy to ensure that you put the right focus on the sales that increase your profit and not just your revenue.
- Maximized Sales Resources – An article on The Houston Chronicle states that the primary role of your sales force is to generate income for your company. An efficient travel and expense management software helps them fulfill their responsibility. You certainly want your reps focused on winning prospects over rather than spending time accomplishing admin tasks. With the right tools, they don’t need to spend long hours filing expense reports.
- Prevents Fraud – The website of the Minnesota Society of Certified Public Accountants or MNCPA showed alarming statistics on employee expense reimbursement fraud. The numbers were taken from a published study made by the Association of Certified Fraud Examiners. In this study, it showed the median amount lost by companies due to this type of fraud was $30,000 in 2014. Previous studies show this number fluctuating but not going below $20,000. It is even more concerning to know that it takes an average of 24 months for the fraudulent activities to be discovered.
The amount of money that you could possibly lose may not seem a lot compared to the revenue generated. It is not the spending culture that you want your business to have. In addition, these amounts can pile up and certainly affect your company’s profitability in the long run.
Reasons for Inaccurate Reports and Its Business Impact
Inaccurate expense reports are due to a lot of different factors. But it all begins with the challenges that users have in filing these reports. Despite strict company policies, you may observe that your sales representatives still have reasons why they are not able to complete this requirement. Below are some of the common roadblocks that prevent your employees from filing accurate expense reports.
- “It is so difficult to do!” – Filing expense reports can be a nightmare for most employees. Gary Belsky, the co-author of the book “Why Smart People Make Big Money Mistakes – and How to Correct Them” was quoted in an article on Reuters about why people hate this task. Belsky stated that most people find clerical responsibilities to be overwhelming. And expense reports certainly qualify as clerical. It involves scanning receipts, encoding information, and defending claims.
Because employees find the task so stressful, they may try to put it off until the last minute. And when they finally get around to doing it, they rush to get it completed to make the deadline. The result is either they ask for an extension or submit a report with incomplete documentation and information. Your data then cannot be used to analyze how profitable the business trip was.
- “I lost the receipts!” – Whether employees used company issued credit cards, personal credit cards or cash to pay for the expenses, receipts are required as documentation. But one of the most common challenges employees have seem to be holding on to those receipts. Either these get thrown out or damaged. As a result, there is no way to validate the reported expenditure. This increases the risk of fraud as more than one employee can claim for the same expense.
- No Time – As defined earlier, your sales force’s main responsibility is to maximize customer conversion. This involves a number of different activities from office meetings to taking prospects out for a bit of entertainment. With them focusing on closing sales, admin tasks are often the farthest thing in their minds. As a result, they work on their expense reports at a later time. Sadly, with no record of their daily activities, the risk of inaccurate claims becomes higher.
Expense Management Made Simple
The best way to ensure that you get accurate reports is by making the process simpler for your employees. Travel expense management software can help you out with that. Below are some of the ways this tool can make filing expense reports a more manageable task.
- Receipt Tracking – Business expense management software has features that make keeping receipts less stressful. Employees can easily scan and save receipts as the tool is often available to use on various platforms. It can be done using a mobile phone, tablet or laptop. So your sales reps don’t have to wait until they get back to their hotel rooms or the office to keep a record of the receipt.
- Integrated Payments – This feature offered by most of the best expense management software is probably one that your employees will fall in love with. By integrating or linking credit card accounts into the system, the process of encoding expenses is streamlined. There is often no need to manually do this as the system automatically tracks and records the credit card activities.
- Itemized Expense Report Creation – One of the dreaded tasks involved in filing reports is the need to fill out multiple forms with virtually the same data. For the lucky ones, it may be one form but one that requires a breakdown of all the expenses. So, imagine how long it will take to complete that for trips that lasted multiple days. An expense management tool can automate this process. So, all your employee would need to do is review it before submitting.
Whether you’re looking at cutting costs or improving your sales and marketing strategy, the data you get from expense reports will be invaluable. Discover your options by learning about what other businesses have to say about the expense management software providers listed on CrowdReviews.com.
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