The Must-Know Benefits of Expense Management Software

Expense management is one of few areas that still sees a commitment to paper records over information technology. Some businesses still use copies of receipts and physical expense reports (even if the employee completes them online). However, expense management software from providers like Divvy allows businesses to automate expense reports out of existence. This streamlining can have financial and time bonuses for the organization. 

Here are just a few of the many benefits of expense management software. 

Streamlined workflow processes

Digital management makes every process that uses it much smoother, quicker, and in most cases, more accurate. Expense management software accomplishes these advancements by eliminating steps that require the physical review of paperwork. 

Employees can instantly convert receipts into a digital format and update expense reports from their smartphones. Even if your employees are technology challenged, they can update the receipt database on any PC or laptop. Once in the system, the accounting department can review receipts online, verify that the data on the digital expense report is accurate, and reimburse the employee. 

More accurate accounting

Expense management software eliminates the middle-man by making the review process digital versus physical data input. Digital processes reduce mistakes, and in many cases, a digital approach can eliminate input errors.   

For example, an expense manager in the accounting department no longer has to input expense data manually. Accounting personnel no longer physically add up all the items in an expense report. Verifying expenses while juggling multiple receipts is a thing of the past. 

In addition, there is no lag between when a report is submitted and when it is processed. Current data means compliance with legal and client accountability requirements is easier. It also means the data is suitable for program and project budget projections.

Eliminating fraud

According to one survey, expense fraud accounts for almost $3 billion in lost revenue annually. One instance of expense fraud is not damaging to a company, but if many employees actively fudge on their expense reports repeatedly, the financial impact can be significant. 

Indeed, changes in expense review policies are in order in many small businesses. Those businesses would benefit from the creation and adoption of formal expense criteria. While both goals are laudable, expense management software can eliminate most fraud by implementing real-time alerts when an expense does not meet specific legitimacy standards. 

Management and the employee can be alerted of a suspect expense entry, and management can then approve or disapprove the expense. Management approval clears the employee and authenticates the expense. 

Fixing Mistakes

In cases where the entry was a mistake, the employee can quickly fix the error. In many cases, the error is not fraud but is a simple misunderstanding of what qualifies as an expense. 

In addition, expense management software permissions allow restricting expenses from specific venues, trigger approval requirements and provide instant policy summaries so the employee can see why an expense entry might not be legitimate. The system can also reject prohibited expenses at the point of an employee scanning a receipt for an expense report. 

Ease of expense reporting

There is a reason many employees procrastinate the completion of their expense reports. Organizing receipts and filling out expense forms is laborious and keeps employees from their actual work. In addition, filling out expense reports is boring, and bored employees are prone to errors.

Expense management software makes that process of entering expenses into a database, assembling an expense report, and submitting it simple, easy, and fast. Automatic Character Recognition software lets a smartphone app scan and convert a receipt into a digital form at the point of receipt.

Additionally, expense management software has progressive updates to expense reports, which means every expense report is up-to-date with the latest information available. Current information means summary reports are more accurate, and there is no waiting for employees to fill out and file their expense report paperwork.

Money savings

Not every expense report that is wrong must be the product of fraud. That $3 billion figure notwithstanding, most erroneous expenses claims happen because of an employee’s misapplied policy. Other errors are mathematical or input errors. Every inaccurate expense paid out, however, costs the business revenue.

Expense management software all but eliminates this issue. Apart from digital checks on expense entries, the process of manually checking expenses report-by-report is much easier when the reports and receipts are online. 

A company with tighter control of its expenses will pay less in erroneous entries claimed by employees. Employees will be more careful because of the alerts that go off whenever they enter an expense not covered by the company expense reimbursement policy.

Easier Verification

Some employees rely on convoluted paper receipts to be too much of a hassle to verify with the employee’s boss. Verifying an entry on a paper report means making a copy of the report, tracking down the paper receipt, tracking down the boss, and verifying they approved an expense. 

The accounting personnel will still have to track down the employee’s boss, but all the other steps are automated. Receipts are easily recalled on a PC or smartphone. The report can be sent with receipt images via email and text messaging systems. Verifying an employee’s entries has never been easier or quicker.

Final Thoughts

If you are still using paper-based expense management methods, you are not alone. You would, however, benefit from expense management software. Implementing a robust expense management software system in your business will make expense management reports easier, less costly, error and fraud-free.