Switch to Paperless Reimbursements: Make Your Expense Management Go Digital
Today, many businesses try to leverage a cloud-based travel and expense management software to acquire a 100 % digital process, yet very few have been able to do it successfully. It occurs either due to inadequate deployment of the company’s operations or limitations in the expense management system.
Here, we will explore some of the common challenges that accounting and finance departments face with reimbursements. Plus, we will understand the best practices to overcome these challenges by using the right solution for your business.
Around 38% of businesses still ask their staff for paper receipts to support their expense claims after compliance is met. They encourage enterprises to refrain from paper receipts to minimize the carbon footprint as well as promote a paperless transaction.
Let’s check out how enterprise methods are responsible for cases where this takes place.
- Your organization still needs a hard copy of receipts.
- Your organization still uses pen and paper-based expense forms/sheets.
The solution to process such limitations is straightforward and simple. The accounting and finance teams should avoid entertaining paper-based expense forms/sheets, receipts, or any other reimbursement-related proof. Also, it’s critical to keep updating expense policies continuously.
The next set of problems is presented by system limitations for enterprises that have acknowledged the process issues and have made digital uploads essential.
- The solution enables an upload, but there’s no simple way for staff to scan them. It’s one of the common complaints by organizations leveraging a travel and expense management software.
- The system does not enable uploading soft copies. It mostly takes place when you handle expenses on a spreadsheet-based software.
- The solution does not allow for online rejections and approvals of expense reports. It forces staff to submit hard copies to the approvers/managers.
- Employees face trouble with email receipts, where they are forced to print and scan receipts. With above 25% receipts in the inbox, staff must have an easier way to submit receipts.
- The system fails to handle policy violations by itself, so staff ends up filing paper forms instead.
- Business travelers who report expenses can make involuntary errors- numbers entered incorrectly, duplicate costs or expenses related to the previous settlement period. Also, there may be cases of internal fraud.
These issues might be due to ineffective utilization or poor adoption of your expense software. If the problem is the latter, then organizations must lookout for approaches to accurately automate your T&E management as it will help you in developing the right methods backed by a capable system.
Other than the apparent poor implementation of digital travel and expense, keeping reimbursement on paper poses a significant threat to the compliance efforts. Here we present some consequences in keeping a manual record for expenses.
- Poor policy compliance
Manual checks for policy compliance are tedious and time-consuming. Automated expense management software solutions flag policy violations on bills with more accuracy than humans doing manual checks.
- Duplicate bills and fraudulent claims
Manual policy checks on expense receipts observe a higher rate of fraudulent activities leading to reimbursement of fake claims and approval of duplicate bills.
- Unusable data
Paper receipts do not allow team members to access valuable and appropriate travel and expense data in hand. Complete visibility from the data can be used for better policies, and reimbursement structures when the information is stored digitally.
- Vulnerable records
Handing paper receipts is costly. It leads to irreversible damage in reimbursement proofs and tax. It could prove detrimental to the health of your company.
Digital checks minimize the reimbursement turnaround time significantly. The cost-benefit of staff hours saved is a sizable saving for organizations.
These above points make a compelling case for assessing the present setup. Plus, it can offer you with enough visibility into whether you must make the switch to an automated receipt and expense management system.
Let’s see how expense report software makes the reimbursement process truly automated while.
Customize the Receipt Organization and Reimbursement Solution
Many administrators usually need to develop customizations on top of their travel and expense management solutions. But many are unaware of the customization features that are offered by the solution. A typical instance is when organizations want to capture more fields for each receipt submission.
Let’s take a look at these three major customization options, which will resolve problems for you.
- Utilize custom expense categories and fields in order to generate a comprehensive receipt form
Many expense receipt management systems enable you to define and add custom fields to the expense sheet. This use case can be when a company has custom categories for accounting, or when they need to know if an expense was made on a business or personal card.
- Utilize cost centers and projects to know business spends better
Many companies will define cost centers to understand the allocation of budget. Such expenditures can be for office stationery, client events, marketing spend, and so much more. A close requirement can be when you need to monitor expenses by projects. Usually, the feature is beneficial for non-profits. Your solution can easily associate receipts with the cost centers or projects. It can help you organize your expenditures with respective tags.
- Increase the Adoption by Making Receipt Submission Easy
The obvious reason for staff not submitting receipts on time is that it’s a laborious, manual process. It’s essential to understand receipt attachments and make it simple for your staff to submit receipts without the need for the physical copy. Here’s how to do it.
- Submit receipts from your inbox directly
Top receipt management solutions enable you to forward email receipts to a particular address for instant submissions. You can encourage your staff to do so, in order to enhance productivity and eliminate manual entry completely. But, the accuracy of the method has been questioned by many users. In such circumstances, it’s good to look for other solutions that can offer apps for tracking expenses inside your email.
Build Strong Expense Report Approval Workflow
Many T&E solutions include a module to make approval workflows. It’s common to view the option of allocating a single approver per staff, which might work for SMBs. The gap lies in how complicated and customizable the approval workflows can be. So, for organizations with more than 80 staff, answering the following questions might be quite useful before zeroing down. Once completed, search if your solution can generate the custom flows for you.
- The number of approvers you need to review an expense report.
Many organizations have a one-level method with direct approver responsible for approving expense reports. But there are a few businesses that might want to have many approvers. Additionally, these approvers from accounting and finance departments are also kept in the loop as part of the review process.
- Sequential or parallel-know approver sequences
At times, expense reports require to be approved by each assigned reviewer. A few organizations may prefer a sequential approval method. It takes place when you want an expense report to move to the next approval stage only after the previous step is completed. In these circumstances, you can set up sequential expense report approval.
- Automating expense policy checks
The final step before finalizing reimbursement is to make sure that the expense claims are compliant. Automating the above steps makes no apparent sense if your system can’t ensure complete compliance. Some added advantages of automation are that the solution automatically runs real-time policy checks and flags expenses with policy violations. It further enhances compliance.
Expense policies can be difficult to set up. While a few solutions may need you to manually check for policy violations, others enable you to generate complicated policies using reports, staff, receipt, and other properties.
The True Power of Expense Management Automation
With the world going digital, it becomes crucial for organizations to keep up with present trends. Automation helps to serve this purpose. With redundant activities being automated effortlessly, staff, as well as the finance department, can spend their time efficiently on things that truly matter. Plus, a cloud-based expense management solution, such as SutiExpense, can offer real-time policy checks, detect fraudulent bills, and much more-organizations can ensure an increase in ROI, effectiveness, and productivity.