How to Streamline Your Company’s Employee Expenses
Managing employee expenses is crucial for accurate bookkeeping, tax compliance, and cost control. However, manual methods like sifting through receipts, storing claims in shoeboxes and scanning emails are complex and error-prone. Manual processes also take up a lot of employees' time that could be focused on more strategic tasks.
Automation offers a streamlined solution to these challenges, simplifying expense management and minimising the risk of mistakes. This guide will delve into the best strategies for automating your company’s employee expense processes, helping you achieve greater accuracy and efficiency.
Challenges with employee expense management
Managing employee expenses can be tricky, particularly if you want both accurate and real-time data. As businesses strive to stay competitive and manage resources effectively, addressing these challenges is crucial. Major hurdles you need to overcome include:
1. Missing receipts: It’s all too easy for anyone to lose or forget to collect receipts. But when receipts go missing, it complicates the reimbursement process and can lead to incomplete or incorrect expense reports. This not only delays reimbursements but also creates headaches during audits.
2. Late submissions: It's common for employees to submit their expenses late, which can mess up accounting schedules and cash flow. Timely submissions are crucial to keep everything running smoothly, so delays can be a real hassle for both the employees and accountants or bookkeepers.
3. Approval delays: If the approval process isn’t streamlined and optimised, it can result in major bottlenecks. Multiple layers of approval or busy managers can significantly slow the process down. This is frustrating for employees waiting for their reimbursements and impacts overall efficiency.
4. Misclassified expenses: Manual data entry is prone to mistakes, whether it's entering the wrong amount, misclassifying an expense or missing a receipt altogether. These errors result in inaccurate finance reports that need more time and effort to fix.
5. Duplicate claims: Sometimes, claims can be accidentally submitted twice. This can lead to overpayment and complicate the tracking process for accountants and bookkeepers, who have to sort through duplicate entries.
All of these challenges have one thing in common: they mostly come down to human error. Manually handling a process as intricate as employee expenses takes up valuable time that can be better utilised by both employees and business owners. The simplest way of addressing all of these challenges at once is by removing the risk of human error through automation.
Bookkeeping automation makes submitting and processing expense claims more efficient while ensuring optimal accuracy. From processes like submitting mileage claims to categorising data, the technology removes the risk of human error and makes expense management in general much easier and quicker. A combination of automated tools and robust procedures can significantly mitigate these challenges leading to a more efficient and reliable expense management system.
What automated expense management delivers
Utilising an expense management software is the most effective way to streamline the process through automation, making it easier for employees to adhere to policy rules and enhancing efficiency for both employees and the finance department:
1. Turns employee phones into receipt scanners: Expense automation tools allow the user to easily take a photo of a receipt or invoice with their mobile phone. The software then extracts and populates the data automatically. This eliminates the need to keep physical receipts because all the information is uploaded to the cloud, where it is safely stored and accessible to your finance team.
2. Automated data extraction: Automated data extraction (also known as OCR technology) captures and processes data from receipts, invoices and bank statements. It automatically identifies and inputs key information like dates, amounts and vendors into the system, reducing manual entry errors and saving time while ensuring accurate and effective reporting.
3. Optimised document tracking: Every claim sent through is visible to those with permission, making it easier than ever to keep track of claims and paperwork. This also makes it easier to enforce proper compliance and ensure all documents are sent through with the right information.
4. Approval notifications: Employees receive real-time updates and notifications throughout the approval process, which is made easy for business owners or finance managers to review. Once reimbursed, the automated system promptly sends them a confirmation message.
5. Mileage tracking: A sophisticated automated expense management tool will also allow you to track and add mileage claims effortlessly. You can record trips automatically or manually on both desktop or mobile - and the software will calculate the reimbursement based on legislative or custom rates.
6. Syncs with accounting software: A good expense management tool will integrate with the accounting platforms your company uses for seamless accounting management. Expense reports can be exported in several formats such as PDFs and CSVs. Reports can be sent via email automatically - meaning everything will be done on time.
By automating data extraction and optimising document tracking, automated expense management tools reduce manual entry errors and support more accurate reporting. Real-time approval notifications, effortless mileage tracking, and seamless integration with accounting software further simplify financial management. This holistic approach not only saves time and minimises errors but also ensures compliance and timely processing of expense claims, making financial operations more efficient and reliable.
Ensure accuracy and spend more time on analysis
Automation doesn't only streamline the entire expense management process for businesses, but it also makes it possible for more advanced data analysis. By accelerating the submission and approval process, you open up more time for valuable actions such as:
• Real-time tracking: Automating the employee expense process provides real-time visibility into all submitted expenses. Managers and finance teams can instantly access up-to-date information on pending, approved and reimbursed claims. This kind of access makes it easier to monitor spending patterns, detect anomalies and manage budgets more effectively.
• Enhanced expense analysis and insights: Real-time tracking allows for continuous expense analysis. Automated tools can generate instant reports and analytics, providing valuable insights into spending trends and categories. This real-time data enables businesses to find cost-saving opportunities, evaluate the effectiveness of their expense policies and adjust budgets based on current financial data.
As you can see automation enhances efficiency and unlocks advanced data analysis opportunities. By streamlining submission and approval processes, you get real-time visibility into expenses, enabling better monitoring of spending patterns and budget management. With continuous expense analysis and instant reporting, business owners benefit from relevant insights to refine their financial strategies and business planning.
Embrace the future of automated employee expense management
Automating your expense management system is only one step in the journey towards automated accounting and bookkeeping, but it’s a critical one. Bookkeeping is the foundation of effective accounting - and is also where a lot of errors and bottlenecks can occur, so getting it right is vital. By streamlining your expense management process, you simplify all of your downstream accounting requirements. This will dramatically improve the efficiency of your entire operation.
Enabling businesses, bookkeepers and accountants to easily automate expense management is exactly why we built Dext.
The best bookkeeping software for businesses delivers receipt capture, automated categorisation and seamless integrations with all major accounting systems like Xero and QuickBooks. It also has an easy-to-use mobile app, making it simple for you and your employees to submit expenses on the go.
Make it easier for employees to submit expenses and save your bookkeepers from sifting through a shoebox of receipts. Sign up for a free trial of Dext today.
