As more tasks were put on the shoulders of an average employee, the more that businesses are looking for solutions that can increase the efficiency of its processes. Technology plays an important role in spawning new advances in the business environment, which all have a common advantage of increasing its user’s productivity and efficiency in executing his tasks.
The Paperless Advantage
The simplicity and familiarity with paper make businesses seem “stuck” with using it, even if they find it stressful to deal as far as an organized system of processing and filing is concerned. The days come, and so as the stack that gets higher and bulkier.
Establishing and maintaining a document management system could be stressful and entails a lot of hard work, attention to detail, and skills in categorization. Documents should also be intelligently filed in order for file access and retrieval to be done faster and easier. Going for electronic documents is a sigh of relief for businesses dealing with loads of information and data. It allows them to consolidate everything under one repository without the bulk of physical storage spaces. Files are also easier to locate, access, share and distribute. Computerized systems are also effective in automating the processes, thereby causing a more efficiency and productivity in the workplace.
Finance departments have expressed satisfaction in dealing with paperless transactions. First, it saves them steep costs of printing and mailing everything. Second, it saves them more time from processing to filing paper documents, which also requires huge physical storage spaces. Going paperless boils down to the issue of convenience and driving down costs.Also, going for electronic documentation automates the audit trail. Businesses nowadays are being implemented with stricter guidelines and compliance with transaction visibility and storage that should be able to hold accumulated data for many years. Digitizing documents make it easier to store and access as needed.
According to a statistical report, 42% of the surveyed businesses reported that they have experienced an increase in productivity by adopting a paperless office.
While the world isn’t ready for full paperless transactions, the advantages are already felt in the areas where it has been implemented. A business should be able to do its own homework in knowing what area of his company that can benefit better a paperless advantage.
Challenges in Expense Management
Now that more businesses are going digital, those that are left behind felt more pressure from continuing with traditional methods. In the finance department where paper is the most prevalent medium used, this is especially difficult as most policies and regulations imposed involves paper based transactions. Given the case, most large scale businesses aren’t suffering as small businesses do in terms of a more organized system and more dedicated finance workforce.
Expense management is a long term issue in any business, particularly that business travel is increasingly growing nowadays. According to GBTA, or Global Business Travel Association, they projected in 2015 that business travel spending globally will increase by up to 8.6%. This is logical, especially that advancements in digital technology accelerate business growth through efficient and expansive global communication and modernization. Mobile technology also strengthens client-business relationships, thus enabling more innovations to flourish globally. Expense management will always be part of any customer interaction, moreso with business travel that strengthens more ties apart from its home environment.
Business travel is just one of the contributing factors in the stress of expense management. Generally, businesses face challenges from employee initiated expenses that are distributed across different areas. Inefficient methods aggravate these further, and is costing much in terms of both the company’s time and resources.
Outlined here are the most prevailing challenges that businesses face concerning the traditional expense management approach:
- Reliance on manual expense management process.
- Prone to errors due to data redundancies.
- Limited visibility over expense management processes.
- Inefficient receipt attachment process.
- High processing costs.
- Lack of travel policies concerning budgets and report submission.
- Lacking auditing trail and visibility.
Manual entry in spreadsheets is the most common way of executing expense management. While a tabular form is effective when a small number of expenses or users are involved, this becomes ineffective when it reaches a certain stage of growth. Doing manual entry of many transactions is more prone to errors, increasing the chances of wrong input and redundancies. Spreadsheet management is also a skill, and not everybody is comfortable using it.
It is quite difficult to do tracking in a paper based expense management filing. This adds more time to an already long process in dealing with multiple expense claims and reimbursements. The lack of visibility with the process involved also add to the distress of employees while waiting long for the approval of their claims, much more upon knowing that not everything they detailed wasn’t approved because of unmet criteria that wasn’t defined in the first place. This creates a lack of trust and confidence in the system, resulting to decreased work efficiency and disinterest to work.
A traditional expense approval process is a tedious task, most especially that it follows a hierarchical process. Following the trail requires manually submitting to the concerned authorities which also takes time to do, especially when the employee is busy with his own tasks, or the signatories are unavailable to entertain them. The lack of streamlined processes adds to the length of the approval process.
Official receipts are important in any business expense and it is quite hard to manually detail and associate receipts with it. Most receipts are printed on thermal paper, which fades easily and may render invalid when reports weren’t submitted right away. During business trips, the risk of losing or forgetting to get receipts can add more to the burden.
Lacking of supplier negotiations beforehand, contribute to the increasing travel and processing costs. Employees on travel tend to book anything that is convenient for them, without regard to budget constraints, especially when nothing is defined in the first place. The time it takes to process expense claims may also contribute to indirect costs of the business.
The lack of defined policies and regulations concerning the report submission will result in piles of backlogs to flood the finance department. Dealing with claims of long ago make it more difficult to check and verify, especially when receipts started to fade, and an employee already snapped out of frustration.
Consolidating all the inefficiencies of manual entry and paper based processes will result to a lack of audit trail, which is essential in regular finance reports. Compliance may be hard to achieve when all details are unaccounted, and with lack of proofs or supporting documents.
It is becoming increasingly important that the finance address these challenges in smarter ways, in order to have a flexible and lasting solution.
Benefits of Using Automated Expense Management
Technology plays a significant role in any business that wishes a more efficient system of dealing with crucial processes in the company. Overall, technology promotes both efficiency and productivity by incorporating electronic and automated systems.
An expense management software is a suite of intelligent methodologies that streamlines all documents and processes involved in expense management, whether in the office or remotely. Employees can make real time reporting and approvals with just a few works with their mobile devices. The finance will benefit from the electronic filing system, that will increase their productivity gains both in time and money savings. There is still life by adopting digital technologies in expense management.
Here are some benefits that businesses can get from one of the best expense management tools out there. The list will be updated for sure, especially that technology is advancing further in the growing travel industry today.
For more updates about the latest benefits, see CrowdReviews’ reviews of expense management tools.
- Receipt scanning
The prevalence of mobile devices enables business travelers to capture the image of the receipt and send it to the expense management system software real time. This minimizes the method of physically attaching the receipts on the report, although most businesses still require to do so. But in most cases, updating information and making electronic versions of paper documents will be effective in filing and storage, which can benefit businesses in many ways as well.
- Expense policies and alerts
Expense management tools are have interactive capabilities which allow users to receive alerts when there are errors or redundancies with expense entries. It will also inform the user if a policy has been violated, or the budget has already been exceeded.
- Automates allowance assignment
An expense management app could actually designate a considerable allowance for certain business travel situations, taking into account the costs of travel expenses from prevailing rates or vendor supplied figures. This can significantly increase overhead costs and out of budget or expensive bookings and expenses.
- Real time reporting (and approval)
Through the mobile capability of most expense management software, business travelers can make real time reporting of expenses that needs immediate approval by sending it remotely to the authority concerned, or by uploading it to the expense management system.
- Accounting integration
Automating the consolidation, submission and approval of the whole expense management processes will make it possible to be integrated with the company’s existing accounting system.This in turn can make filing and cross checking expense entries with other filed expense claims and reimbursements of other people involved in the same business trip easier to conduct, in order to avoid multiple and redundant claims. This can also discourage making fraudulent claims, which costs a lot from the business to address separately.
- Mileage tracking using GPS
This is an added feature in a mobile expense management app, which can effectively track the whereabouts and distance covered by business travelers during their trips.
Digitizing the processes involved in expense management is one of the strongest solutions in implementing an efficient, orderly, and systematic workflow, which not only benefit the business, but most especially the employees. It is vital that businesses should not delay action concerning establishing effective and lasting systems, which will lift all barriers and limitations to their growth.
Get in touch with the actual client feedback by seeing these latest reviews of expense management tools from CrowdReviews.com.
John Tovar
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