Much of the business practices and methods have significantly evolved over the past years. All have ventured in with a good start, but many have fallen short and discontinued because they weren’t able to cope up with the pace. Those who are fortunate enough to stay, were the ones who are equipped with the necessary visionary skills and consequently, readied themselves with the shifts, downs and growths that came. Modern day managers must be skilled and smart enough in order to properly address the problems arising from using traditional methods of management. They should be open-minded to continue learning, and in embracing modern solutions as well as its associated challenges.
Technology has brought in many ways of promoting productivity, efficiency and convenience to businesses, but at the same time, introduced modern challenges that should be faced alongside too. Today’s world offers many opportunities and possibilities for new innovations. But one should be careful on what to grab along the way, for most of these are just fads and trends that are constantly being replaced easily. A smarter move will be gauging the opportunities first, and weigh in its futuristic status. Venturing in a long term opportunity is more profitable than a one time big success, as far as revenue stability is concerned.
Reaching success today is a bit “easier” to attain with the right combination of technology and skills. But on the other hand, staying in the course is where the bulk of work and effort go. Modern managers should equip themselves with the necessary skills about decision making with the future in mind.
One of the tougher challenges that business managers face today is how to optimize its resources. As people get busier, time is becoming a rare commodity. Businesses are losing so much money, because of the many inefficiencies of traditional processes and management systems that they face nowadays.Business managers are continuously seeking the greener side, in order to gain financial management freedom in today’s modern world.
Expense Management Challenges
According to a travel and expense management report in 2015, about 75% of businesses that shifted from manual expense management into an automated system experience relief and cost savings.So what is it that’s limiting businesses to be efficient in their expense management using these so called, traditional methods?
Expense management is an essential skill that any business must be knowledgeable in dealing with. It is actually second to payroll, which has the biggest part of the pie of the expenses of a business. Expense management becomes more difficult to control as businesses scale and grow. Here are other challenges that businesses face when executing manual methods and processes of expense management:
- Poor visibility of processes
The spreadsheet method is the most popular expense reporting medium used in businesses. But without establishing an expense claims and reimbursement policies, it cannot hold as much information needed to verify all expenses incurred. Expense categories could vary, and descriptions provided may be subjective or misrepresented. And also, because processing expense reports is a tedious and long process, the finance department could no longer verify the expenses thoroughly as the project or travel has long transpired.
- Prompt report submission
Manually creating an expense report will use a lot of time listing down and detailing every expense. As soon as an employee gets back from a trip, he needs to finish a lot of reports – details about the trip, reports from the meetings, and also his expense management sheet. This should be done on top of usual work in the office or organization. Consequently, he may find time to submit it on a later date.
- Time consuming processes
Creating an expense report is already time consuming itself, much more with undergoing the processes of submission and approval. In a manual, paper based, expense management system, an employee who will submit his report should follow a hierarchy of steps and seek many approving bodies prior to final submission to the accounting/finance department. The approval process also takes time to complete, especially when many other employees have submitted theirs at the same time that you did. There are many processes involved too, like verification of receipts, reconciling of expenses, and input of expense data into the company’s accounting system.
- Receipts
Attaching receipts are one of the drawbacks of using a manual expense management system. Stress is added into the business travelers when dealing with lost, forgotten or destroyed receipts, which can render their expense declaration inaccurate.
- Accuracy of data
There are many factors that can compromise the data in a traditional expense management system. Manual data entry errors, improper description and duplicate entries are just some of the errors that a traditional expense management system may be subjected to.
- Lack of policies
The lack of travel and expense policies may subject a business to fraudulent expense issues, and also compromise the integrity of its system. It may also result to overspending, and more serious issues like tax evasion or non compliance.
As businesses feel the effect of globalization, there is an increasing need for professionals to move often, even go as far as beyond the borders, in order to cope up with the fast pace of expansion. But in order to achieve its goals fully, businesses should implement effective processes regarding travel and expense management, which should be cost efficient without compromising quality and output.
Benefits of Expense Management Tools
By using technology, a business can automate the expense management process by using expense management tools. It creates a continuous flow of processes, which can effectively saves time and effort. By digitizing all documents and expense reports, it can also enter the system and be processed promptly. By adding a mobile capability, business travelers can access and update the system in real time, saving them a lot of time, and reducing the risk of losing or forgetting receipts.
Here are some of the benefits of using an expense management software:
- Paperless
Digitizing all reports and attachments can make sending, processing and storage easier to execute. This can reduce the cost of paper and ink, and the need for additional physical storage spaces for filing copies of reports.
- Less processing cost using automation
In businesses, the cost can mean either time or real money. Automation can save businesses both – first, by omitting the physical elements of manual expense reporting like printing; and also the time used to manually create a report, seek approval signatures, and the expense process itself. Through this, employees can be more productive and have focus over their actual tasks.
- Better cost control
By enabling all expense management processes to be staged in one platform, its visibility is increased, thus the facilitator can have an overview of the spending habits of its employees. Businesses can also gain insight from the total expenditures incurred by past projects, which can make more sound decision making in similar situations in the future.
- Faster reimbursement and expense reporting
Expense report and reimbursement policies can also be incorporated with expense management tools. This in turn can automate the implementation of the said policies in order to promote strict and fair compliance for all employees.
- Increased expense visibility
An expense management software has a built-in dashboard, which can be seen at a glance for a brief information about the expense status. It can also set up a reminder system, in order to alert the finance department or the user, if one is approaching the intended amount for the budget, or if it has been already exceeded.
- Negotiable discounts
By partnering with reputable suppliers for a business’ travel needs can grant more savings in terms of corporate accounts, which can guarantee the best and discounted rate if one will just implement his bargaining skills. A business can negotiate with these travel agencies for a possible system integration, so employees can automatically book with them.
- Forecast expenses
Top expense management tools have the capability to process pre-approval reports, which can let the business forecast pending expenses for a given project.
- Direct integration with existing company accounting software
An expense management tool is capable to integrate with other business tools in order to maximize the efficiency of its automation. Once approved, expense reports can be automatically endorsed to the existing accounting system of the company.
- Modernization of expense management system
When hearing about the term “modernization”, one will immediately associate it with automation and electronic systems. But modernization may entail more of this, and it is important that both employees and managers alike will embrace the ideas of modernizing the processes. Everybody in the business organization must comply, and must be ready for the change.
A web based expense management software enables the business to remain efficient in executing its processes, regardless of the number of employee expense claims and reimbursements it receives on any given day. It makes use of the cloud, and a third party provider hosts the maintenance of the system, thus taking out the burden from the business.
- Customized reports
Some expense management tools incorporated a rich, graphical user interface which can let the users change the format or layout of its reports according to preference. This can make the reports-turned-into-presentation pleasing to the eye, so that viewers or the user can have a better understanding of the insights arising from it.
- Mobile integration for better tracking and reporting
An expense management app is usually developed alongside the desktop version of an expense management software, which allows access to the system even an employee is outside of the office facility. This widens its capabilities of making timely and accurate reports, and provided in real time.
- Categorizes expenditures automatically
An expense management software has an intelligent menu system which can automatically categorize an expense based from the information that the user associated with it. This is just one of the features of an expense management tool which can make end-to-end expense management processes be seamlessly executed and accomplished.
CrowdReviews.com can provide a list of expense management tool reviews to give your company better evaluation points in choosing the right software provider for your needs.
Trevor Price
Latest posts by Trevor Price (see all)
- Why Document Management Software Is a Must for Every Company - January 13, 2017
- What Are the Best Scheduling Software for Your Specific Needs - January 12, 2017
- What Are the Top Features of Membership Management Software - January 10, 2017