Many businesses nowadays have delved in the period of globalization, enabling accelerated growth not to be hindered by anything except their own choices. Transforming from traditional, towards a modern approach and mindset isn’t an overnight success to make. More often than not, the businesses resistant to change have felt the strong urge to shift as well because the pressure builds up, customers leave, and employees are starting to feel insignificant and powerless. There isn’t literally anything left to do but to pack their bags and go with the flow.
People indulge with the effects of technology in almost every aspect of their lives. And so as businesses. They say, we are the most spoiled era among everything else, that we put a premium on things that make us feel productive and efficient with what we do. We always wanted to feel empowered. We chase convenience. In businesses, it might not be the case of being that spoilt much, its just the way everybody wants to go straight and be filled with: convenience.
Challenges in Expense Management
Expense management, is one of the tougher challenges that businesses face when it comes to managing its finances and resources. It is one of the areas most resistant to change, which chose to operate the way how it was when the company just started. But one cannot blame the finance department, for most of their ways are based on paper, processes need paper, security lies on paper, and all work by tons of paperwork. It is just the norm, the common, the familiar. But what about going digital? Well,yes, and yes. Yes to computer, but still yes to more paperwork. The bottom line here is, the fullness of technology is still about choices; of what will work and what will not. The world isn’t ready yet to go full digital.
But elaborating further, expense management is one tedious work; both on the employees’ side and the finance‘s side. Adapting earlier systems require long waiting and processing, following a hierarchy of steps which makes it more vulnerable to more delays.
According to a research in 2015 by the Global Business Travel Association in Germany, expense reports can reveal hidden costs amounting to about $500,000 and 3,000 hours annually, just to compensate for and correct errors resulting from an inefficient expense management system. About 19% of expense reports submitted have errors, and 18minutes is the average time to correct one. For businesses, time is money, and you can just imagine how much loss is incurred directly and indirectly by inefficient processes.
Further into the survey, it actually defined the more prevalent pain points in using an in-house expense management:
- Constructing an expense report spreadsheet (about 49%).
- Filling up an expense report spreadsheet (about 54%).
- Attaching receipts on an expense report spreadsheet (about 55%).
The study reflected the reality of expense management happening in most businesses that has yet to adopt an expense management software. The effect of the resistance of most to changes can cost businesses huge amounts of time and resources if won’t be addressed right away. The good thing is that the financial industry is rapid in developing and deploying solutions for these expense management woes.
The Prevailing Signs
The unheard voices of employees and the finance people were echoed by that recent survey of GBTA. For the longest time, employees have endured the traditional expense management processes, and the long wait for change was seen as a chase in the wind. But nonetheless, technology is advancing faster than how it was before. Now that we are in the information age, people can actually demand what they need, even the employees. Businesses are becoming more people centered nowadays, and fortunately, have seen the worth of human workforce as very valuable to businesses.
Here are the prevailing signs that one needs change to happen in the way expense management is executed in their business:
- I want to get rid of paper and spreadsheets.
This isn’t difficult to do nowadays, especially that more and more businesses are moving to digital. Since the advent of electronic systems, the once economical benefits of using paper were later viewed as an inefficient and wasteful practice, which also demands huge storage spaces that keep on growing as businesses scale.
Routing paper work is a time consuming task, and has bigger chances of getting lost or destroyed. Reconciling receipts and paper work is also another concern, and filing and storing it is another.
The hierarchy of the processes can lengthen the time it takes to validate and approve expense claims. Lost receipts, or forgotten details will make reports inaccurate and irreconcilable. Routing expense claims on a streamlined and digitized system makes the expense management process more efficient to execute.
- I want better visibility with my expenses.
Businesses tend to partner with many suppliers and vendors when it comes to dealing with employee initiated expenses in business trips, as well as out of office expenses. And with so many payment channels that can be used in such transaction, it is quite difficult to track and manage everything at once. An expense management tool, can solve this by consolidating all supplier transactions and payment channels under one platform, in order to gain more visibility with financial transactions and invoices. Seeing all expenses in a wider and more detailed perspective can help businesses to assess their spending habits and make resolutions about over budgeting and other flaws that might arise. Seeing your business spending status clearer can also lead to wiser decision making later on.
- I want to control and lower the cost of my business travels.
Companies who frequently travel may take advantage of getting a corporate account from one of the more reputable travel agencies. Negotiating by asking discounts not only reduces the cost of booking airlines, accommodations and similar travel related transactions, but will also save your company tons from on the spot bookings and out of budget immediate transactions. Expense management should be a smart financial tool as well, and incorporating methods that can lessen costs is something that should be considered all the time.
- I want to lessen the time used in bookings.
Businesses should make it easier for employees to book business travel related expenses in order to save time in looking for the best deals and comparing accommodations just for the sake of having more savings. Getting ahead means that a company should consider getting a regular travel agency to arrange everything at their expense, with the assurance that they will be securing only the best deals. This can give employees the peace of mind they need, and time is actually saved in the process as well. For risk mitigation, a company should settle for at least two suppliers, and several other contacts (with no obligations) at hand just in case uncertain situations happen.
- I want to have efficient processes to go with my travel expenses.
An expense management software, can make it easier for businesses to oversee the whole expense management processes by streamlining all work flows under one working platform. Consolidating everything under one tool can make it easier to manage, and loopholes be seen and taken action. An electronic expense management system can effectively gather expense claims and its associated proofs from different electronic channels like email, or through a mobile expense management app. Through this, business travelers can send their reports in real time, and receive approvals faster. Receipts can also be photographed using a mobile device, and be sent directly in the system through an expense management app. No need to worry about missing or torn receipts, and catching on busy authorities for their approval signatures. Less paperwork also means a lot for the finance department.
- I want to enforce travel policies for business travel.
It is mandatory that businesses should impose rules and policies regarding business travels, especially concerning expenditures. But by not being able to see firsthand all costs will render these policies ineffective. By incorporating travel policies in the expense management tool can strengthen the need for compliance, but not allowing out of corporate policy transactions to commence or be registered in the system. An expense management software can also deploy smart alerts for both users and facilitators, when a certain allowable budget has been reached or maximized.
- I want an automated solution to my travel and expense dilemmas.
This is possible with a number of expense management tool providers that abound the market today. Many businesses are realizing the positive effects of sustaining a digitized and automated solution, especially with expense management. Reconciling all documents and processes in one platform will help businesses to assess their expenditure points and payment systems. An expense management software also comes with fraud and security features, which can also significantly benefit businesses in terms of cost and peace of mind, and omits the need to source out another vendor for it.
How to Know the Best Expense Management Solution
Knowing the top expense management software solution for your company lies on many considerations like the nature of your industry, the number of expenses-related transactions, the direction of your growth, and your willingness to embrace change. Any solution should be a two way decision; your desire to embrace something new, and the vendor’s willingness to help you address your dilemmas with the right solutions.
No need to do exhaustive researching in finding the best solution. CrowdReviews.com can give you detailed client feedback and expense management software reviews from different business cases.
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