Industry-wide, companies would spend on average 10% of their budget on business travel. Unfortunately, many companies do not have the tools to measure the return on their business travel spend. Organisations without a clear view of their spending and how it relates to the generated income are more at risk of exposure from reckless spending and fraud. And not using expense management software can increase the risk of human error.
While the pandemic shifted a lot of meetings online, history tells us that business activities will be resuming to their prior levels at some point.
Below are some tell-tale signs that an expense management software would be beneficial for your business' cost reduction strategy.
Business travel generates a lot of various invoices and receipts. These miscellaneous bits of paper can easily get trapped under a car seat, forgotten in a coat pocket or simply lost.
While bothersome, this paperwork is necessary for accounting teams to do their job, and for organisations to be fiscally compliant. Not having it can cause issues ranging from mere irritation to penalties from the tax authorities, and that is the last thing you want when your business is already struggling.
Asking employees to complete repetitive, low-value tasks such as recording and submitting expenses manually is not making the best use of their skills. These manual processes take up too much of their time and energy which would be better spent on higher added-value tasks that give them a sense of achievement.
Creating and submitting an expense report manually takes on average 15-30 minutes. Approving and controlling it takes about the same amount of time. Multiply that by the number of expense reports your company processes in a year and you will quickly realise how much money you are paying your employees to complete low-value tasks each year!
Financial department employees worldwide are some of the first to see their hours cut as part of a bid by many companies to stay afloat in difficult times. As a result, the already gruelling and time-consuming task of manually checking expense claims for policy compliance, accurate VAT recording, human errors, etc. may take longer than usual.
An employee who submitted an expense claim may be waiting three or four weeks before being reimbursed. In the case of an international trip, that employee may be thousands of euros out. But even if all they purchased was a monitor to work from home, they will be none too happy at having to wait for their money - and unhappy employees tend to be less productive, costing you more in the long run.
Lacking or inaccurate expense data and dashboards may be keeping you from identifying your largest cost centres, and ways to keep them in check. If you do not know where your money is going, you would be going in blind, randomly attempting cost reduction without the help of accurate data to guide you - and possibly hurting your business in the process. Knowledge is power, and not having that knowledge is costing you more than you know.
Automated expense management software provides you with spend dashboards and visual representations of where your money is going. You can deep-dive into the data to identify trends and spot improvement areas. Accurate data will even help your CFO with strategic decision-making in ways that were never available to them before.
With expense management software, paperwork becomes a thing of the past. Employees can capture electronic copies of their supporting documents with their mobile phones and, where allowed by the tax authorities, discard the paper copies for a fully paperless process. These electronic copies are added to an expense report in a matter of seconds and remain accessible there on out, while also maintaining their quality. Because who has not kept a receipt in their pocket so long as for the amount to become unreadable?
Digitising paperwork removes the burden from your employees of having to keep receipts and organise them while making approval and control easier and faster for managers and controllers. And digitalising your expense process helps make it smoother, faster, and more efficient - thus cheaper.
With an automated expense management software, creating and submitting an expense report can be done from anywhere in just a few clicks or taps, bringing the average time down from 30 minutes to less than five. This gives your employees much more time for the higher added-value tasks you need them to be performing. Managers are also able to approve expenses quickly and on the go, allowing them to focus on leading their teams to success.
Creating a fast approval system is important to you as a manager or business owner, but also to your travelling employees. People are much happier and more productive at work when they feel that their skills are being valued. And happy and productive employees are good for business.
Employees and managers being able to fulfil expense management tasks easily and from anywhere brings down the average time it takes for a claim to be entered and processed. With a manual system, an employee will often submit a claim only once they are back at the office. Then the employee must wait for their manager to physically sign it, creating a drawn-out process for bother parties.
With expense management software, employees can submit expenses the minute they occur, managers can approve them in a few seconds from their phone, and the claims are then automatically controlled and processed. Faster processing means more accurate balance sheets for the company, and more satisfied employees who no longer have to wait for the money they are owed.
Another strong benefit of expense management software is the collection of accurate data and the reporting possibilities available to managers and business owners. Every expense is categorised, and the solution provides reporting at many different levels.
If you want a report on how much your company has spent on hotels over the past 12 months, the data is there and ready for you to use to negotiate better rates. If you want to know which business unit is spending the most compared to its revenue, the numbers are just waiting for you to dive into them. And if you have a niggling suspicion that your weakest salesperson is often the one spending the most per night on hotels, you can check that, too.
Having fingertip access to accurate data makes for better, and faster, decision-making. Inconsistencies become easy to spot and investigate and allow you to curtail excessive spending before it snowballs.
Investing in travel and expense management software may seem counter intuitive in a time when most people aren’t travelling. But keep in mind, this system can also track all types of business expenses with proven advantages. Using a digital solution such as Mobilexpense to centralise costs will allow you to streamline your operations and drive your business towards a paperless future. It will free more time for your employees to spend on value-added tasks. And it will give you a more accurate view of your budgets and enable you to make data-driven, strategic decisions.
Now is the time to be strengthening your operations, and optimising your expense management processes for cost reduction is just one way of making your business more resistant to crises.