Is your Inefficient Expense Process Costing you?

Inefficient Expenses
Over the past decade business travel has become more frequent with global travel being more accessible than ever before.

For back office administrators this may have presented more of a burden than anything, with more expense claims and receipts to file than ever before. Now is the time to start assessing your existing expense process, turning it from inefficient to a well-oiled business process.

 

How to Identify an Inefficient Process
1.     Calculate the time it takes to process and approve

Whether you are a senior manager or administrator, frustration can come from processing an expense claim to authorising them too. If it takes your organisation more than half a day – 1 day to approve your employees, your process is inefficient.

We hear stories all the time about people copying data from one spreadsheet to another. This leaves little time to look at the actual expenses claimed, meaning incorrect expenses may be approved & paid. Calculate the time it takes to process an expense from start to finish. Then multiply this by the number of claims and employees.

 

2.     Know the number of queried expenses you have

Human error happens. It is a fact and one we have to deal with. However, this can drastically increase the time it takes you to process an expense. Know the number of times an expense has been queried or declined and understand the reasons why this happened. 9/10 times it will be due to the incorrect completion of the expense claim. Below are the top three reasons for incorrect expense submissions:

  1. The incorrect receipt was assigned to the expense
  2. The incorrect expense value was entered 
  3. The wrong general ledger code was used

Understanding this data will inform you as to whether your process is working and whether your employees are getting it.

 

3.    Ask your team

Consulting employees and team members is crucial for implementation success. Nominate a few individuals with different responsibilities within the organisation to be involved in your expense system testing. Here you can gather important feedback and understand any problems that may be occurring. After all the aim is to make expense processes, quick, accurate and effective.

Following the adoption of cloud computing, software systems are now providing a faster more streamlined alternative for the expense processes. In an earlier post of ours we considered the benefits employees gain from ditching spreadsheet and paper expense claims. In this post we explore the benefits a cloud-based expense process will provide for your administration and management teams.


 

Benefits of Cloud Expenses Software
1.    Easy Approvals

With Automatic Workflow included in most expense packages, managers and administrators will never miss an expense claim again. Not only can you query or decline incorrect expenses in seconds, software such as Clarity 365 allows you to set up automatic thresholds.

For example: Jane submits an expense that exceeds £100 to her manager Tom. He can approve this expense, however, the internal company policy states that any expense over the value of £100 requires a second authoriser. Therefore Tom’s manager, Cassie has to approve the expense as well. This provides a second level of authorisation and abides to the company policy. Simple!

Unlike lines in a spreadsheet, software systems allow your employees to include a high level of detail in their claims (if required). Therefore expense claims are more coherent and easier to cross-reference, making the processing time much faster.  

 

2.    Reduction in Admin Time

Administrators have one of the most time-consuming roles there are, so it is no surprise that time is never on your side. Online systems aim to reduce the time spent on sorting through expenses and this is one of the key factors when making the decision to move to online expenses.

The need to copy and paste spreadsheet data or manually input is eliminated. As are complicated calculations, which are completed automatically. Providing you with more time on important tasks, such as checking the validity of claims and ensuring they are correct.  

 

3.    Less Disputed Claims

More than 1 in 10 employees had disputed an expense claim with their employer in a survey by Barclaycard Business causing employee and management dissatisfaction. Automated expense systems give the benefit of documented approval or decline. Most systems time stamp the expense when an action is carried out. This gives both the administration team and employee’s transparency and results in fewer disputes over payment of claims.

For expenses that are billable, a more compliant software system can also improve relations between the admin team and your customers. Clients are much less likely to dispute a claim as claims have been verified and checked. When they are approved this is documented meaning payment of the claims should be quicker.

 

4.    Simple Monitoring of Claims & Budgets

Cloud-based expense software makes it easier for employees to claim expenses quickly and on-time meaning budgets will be easier to monitor and stick to. Simple reporting is included as standard with most software systems so administrators can quickly check for any discrepancies. They can also monitor internal and external project budgets in seconds without needing to combine data from multiple spreadsheets.

There are multiple benefits for administration teams and managers as a result of switching to a cloud-based expense system. The outcome could mean more accurate and correct claims being paid and fewer disputes from customers, ultimately saving the whole business time and money.

Although there are many advantages to an online expense system, it’s important you think about how one could work for your own company and the way you envisage cloud-based software replacing your spreadsheets.

 

Use our ROI Calculator to calculate the return on investment you may gain from using a timesheet & expense solution like Clarity365.

 

About the author

 Hi, I’m Chloé and I am the Marketing and Customer Relationship Manager. I specialise in writing about business, marketing and SEO. I like to crossfit in my spare time.
 Find me on LinkedIn.

 
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