In business, managers often have to sort through spreadsheets and paper forms to report expenses manually. Working manually is fine with businesses with a small amount of people. But a business scale in terms of large-scale employees must deal with many changes in its process.
Continuing with the basic methods for reporting and reimbursing expenses creates more problems than it solves. There are hidden costs and challenges in handling receipts, filling out forms, submitting reports, and having those reports manually verified by the finance team. But after all this, you cannot avoid maintaining the expense report as you are legally bound to reimburse your employees for the business expenses they have paid out of their pocket.
The firm can automate the expense reporting task by using expense management software to reduce errors and fraud and accelerate the reimbursement process. It’s also an essential tool for managing the sudden shift to remote work caused by the pandemic, which has forced many firms to fundamentally change their expense reporting processes.
What is an Expense Management System?
Expense management software is the process of reporting, reimbursing, submitting, approving and auditing business related expenses initiated by the employee.
Expense management involves the process by which employees report and get reimbursed for business-related expenses, such as travel, entertainment, and office supplies. This process includes submitting detailed reports and receipts for approval by line managers and finance teams. Essentially, expense management controls how employees pay for business expenses and tracks their spending.
Why use an automated Expense Management System?
While the process may differ depending on the company and the expense management software used, the basic workflow is as follows:
- If an employee raises an expense on behalf of the company from their own pocket.
- The expense is immediately recorded in the expense management software and documents like receipts.
- The employee submits an expense claim or groups multiple expenses into a single report and then submits it.
- Whenever an expense request is initiated, the manager will be notified automatically for approval.
- The finance team will look through the request for compliance and authenticity using the receipt matching.
- The approved reimbursed amount will either be provided immediately or at the end of the month with the salary.
Why should a company switch to cloud-based expense management software?
To start, there are many reasons why the organization should shift to HRMS expense management system. First and foremost:
Organized receipt management:
Expense management software enables employees to report expenses accurately using any device as they incur them. Instead of gathering and submitting physical receipts, employees can simply take a photo of the receipt and upload it. Advanced systems use OCR technology to extract essential details from the receipt, such as the amount, date, merchant name, and category.
Ideally, receipts attached to expense claims are securely stored in the cloud. This benefits finance teams by allowing them to match expense claims to receipts digitally, eliminating the need to sift through paper receipts. It also simplifies internal and external audits, as accountants can easily conduct pre-accounting and trace every reimbursed expense back to its source.
Expense Request related to travel and expense policies:
In some case looking into the compliance and detecting expense fraud are the major concern for finance teams. Expense management software addresses this concern by automating policy enforcement and violation checks to help ensure that employees do not overspend or incur unapproved expenses.
The in built feature in expense management software screens the expense claimed and detect and mitigate violation effectively. If a violation is detected it will immediately notify the finance team. This saves time, otherwise they must do it manually, and claims against policies and emails the submitter.
Smooth Expense Reports Approval:
Traditionally submitting the expense report is a very hectic and time taking process, and it may take time during review and approve them. But with the help of expense management system an automated approval workflow is created to reduce the manual intervention and shorten the approval process.
Therefore, customizing the multi-level workflow based on the firm’s organization hierarchy, and if they have multiple departments in the firm, they can easily create separate workflows for each department.
Detangled Credit Card Reconciliation:
Expense management software simplifies card expense management by preventing overspending by enhancing transparency and curbing fraud. Administrators can assign purchasing cards with defined limits, and the software integrates with card providers to fetch card feeds directly. Synced cards feed pull transaction into the software, allowing to convert and reconcile them easily. This eliminated the need for manual matching and auditing by the finance team.
Diverse Data Analytics:
Real-time expense submission provides immediate insights for the finance team, eliminating the wait for a full reporting cycle. Expense management software offers built-in analytics for visibility into spending at various levels. This helps finance teams review spending patterns and negotiate vendor discounts. Expense management software allows the higher authority to adjust policies, budget, forecast accurately, and make informed decisions.
In conclusion, unlock the full potential of your business with FlexiEle HRMS. Say goodby to the headache of expense management and welcome a seamless, integrated solution that simplifies every step.
With FlexiEle, you can focus on what truly matters- growing your business. Start your journey towards effortless expense management today and see the transformative impact FlexiEle can make. Choose FlexiEle and experience the future of expense management now.
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