Some companies get stuck in their expense management system because they worry about the costs of making changes, especially buying new software and figuring out how to manage it.
You probably do not realize that expense report fraud is hard to detect in legacy systems, especially if your company is prone to manual entries. Employee theft costs businesses an estimated $50 billion annually, accounting for one in every three bankruptcies.
Why is expense report automation important?
According to a GBTA report, the average cost to process an expense report for a one-night hotel stay is $58 and takes 20 minutes to complete. But 19% of expense reports have errors or missing info, which costs an extra $52 and takes 18 minutes to fix.
These factors can be a drain on your bottom line. In other words, companies process around 51,000 expense reports annually. Of which, they spend half a million and almost 3,000 hours fixing errors.
Legacy expense management needs to be faster and prone to mistakes. Even worse, you will have little control over your expenses. If you automate your expense management, it can ensure your business runs smoothly. Even though it has drawbacks, many companies are still determining if they should do it.
For example, in 2022, small businesses with less than 100 employees had the most median loss of money due to expense report fraud, which was $150,000. So, if you are one of them, it is time to get your expense report automation.
Benefits of expense report automation
Picking a suitable expense report automation will help you overcome the flaws and drawbacks of your existing system.
Here are some of the benefits of expense report automation.
Minimize errors
Eliminating human blunders is never easy. No matter how hard you try or how accurate you are, errors happen. And when they do, they can cost you a lot of time and money to fix. With expense management software, human resources are no longer responsible for correct reporting. Everything gets flawlessly automated online.
Transparency and visibility
Expense report automation helps companies keep track of their spending and forecast their cash flow in real-time. It gives them visibility into their business travel expenses, approval levels, expense requests, expense breakdowns, and credit card statements. In this way, they can make more accurate forecasts and allocate more money. Also, it helps your finance team find ways to make your business more profitable.
Fraud detection
You are vulnerable to expense report fraud if your work involves managing finances. There could be a double entry, false reporting, a fake expense claim, or multiple invoicing. It can be hard to spot these accounting mistakes. But with expense management automation, you can reduce your risk.
Most people don’t realize that a financial statement fraud incident can cost a median of $593,000 in lost revenue. With software that scans your transactions, you can spot double payments, errors, and fake reimbursements. Also, you can get data protection and eliminate these risks with expense management automation. The software will flag errors and fraud and notify the sender and approver.
Saves time
We all know how time-consuming it can be to enter and analyze data manually. Additionally, the finance department has to scan all the details to ensure everything is accurate. But with expense management automation, you need not worry about that anymore. It will automatically send the claim report to the approver for verification.
Faster workflows and reimbursement
Getting approvals and reimbursements is one of the biggest time-suckers for account reconciliation. Manually reporting expenses takes a long time to approve and reimburse.
But with expense management automation, you can get approvals with just one click, even if you are not in town. That way, the finance team can start the process without waiting for the employee to return. Additionally, when you need reimbursements, all the receipts and information are in one place, so you only have to get approval.
Cost savings
This technology can save you a ton of money by cutting down on manual work and taking up less time. You can cut company costs using an automated expense management system with an expense reporting function. This advantage is because there is no additional labor cost, and you only pay for the software when you use it. You will not have to buy stationery and paperwork for your office. Also, the software is flexible, so you can store as much expense data as you want without worrying about running out of cabinet space.
Integrated policy controls and compliance
Compliance and reconciliation are two responsibilities of employee expense report analysis. The accounting and legal teams must study the data to ensure everything meets regulatory standards. With expense automation systems, the risks around compliance get eliminated.
The platform will enforce policies. So, employees cannot do anything that goes against the company rules. Automation also makes it easier for the accounting team to keep track of financial records all year and have them ready for audits and tax reports quickly.
Enhances efficiency
Automation will make the whole expense management process easier and faster. It cuts down on administrative tasks and eliminates most of the manual work. This process simplifies tasks such as expense reports and captures receipts and approvals. It saves you money and cuts down on staff time. Further, it speeds up the process, gets reimbursements faster, and makes things more efficient.
Better employee experience
One of the main reasons a business would want to automate processes is to simplify work for employees. This way, employees can focus on more valuable roles to help them become more productive.
Another way to improve the user experience is by making it easier for staff to track expenses while on the go. An easy-to-use system helps eliminate paperwork and makes it easier for employees to focus on the other priorities.
Wrapping up
Expense report automation is evolving the very nature of financial processes. AI, machine learning, and data analytics are all working together to make it more manageable for companies to handle their finances. This progress means they no longer rely on manual expense management to detect expense report fraud.
ITILITE is a platform that helps you streamline your company’s expense management process by bringing together internal spending, automated bills, approval workflows, and accounting reconciliation. Our expense management can help you scale and evolve as your business grows. We can assure you that you will get the most out of your automation!
