Businesses rely on business travel to achieve several objectives. Whether it’s business development or internal purposes, business travel comes at a certain cost.
Did you know that an average company will spend 10% of its annual budget on expenses related to business travel in 2013?
A number of companies don’t track all of these expenses and are missing out on valuable data to keep their business competitive. The ones that do track all of the business travel expenses have a big advantage knowing where the money goes. But that’s just the start.
According to Aberdeen’s 2013 Travel and Expense Management Benchmark Survey, the number one challenge companies are facing is poor visibility into spending. This is followed by reducing the expense processing cost, lack of spend control and needing to eliminate manual and paper-based processes.
How to handle poor visibility of business expenses?
If your company is facing a problem of poor business expense visibility, the first step is implementing an expense and reimbursement policy. Communicate the policy with your employees, it should contain all forms of prohibited activity but also explain how to report on expenses.
The way your employees report their expenses is key to improve visibility on business expenses. Let your employees add a project and a category for every expense they make. That way you cannot only see which kind of expenses are being made, but also account an expense to a certain project in the future. If a business developer visiting a prospect makes travel expenses, but it takes a while to get that new client on board, you can check later what expenses are accounted to obtain that client.
Using cloud based expense management tools allow your employees to add additional information to their expenses. When they use an app to digitize their receipt, the app will read out all relevant data, and users can add details like a project, a comment, an expense type, etc.
How to reduce the expense reporting cost?
The cost of expense reporting consists of several factors. First of all there’s the time it takes for an employee to make the actual report. Studies show that an employee spends about two hours to create an expense report. This is due to the fact that he has to type the receipts into an excel sheet, and match it with credit card or bank statements.
The solution to this problem starts with a cloud based expense management app that can digitize receipts. Digitized receipts can be made with an expense management app for smartphones, a scan of the document or a digital receipt.
Because all of the information is digitized, reports can be made in just a few clicks, saving your employees lots of time!
Accountant / CFO side
There’s also the accountant or CFO that handles all of these incoming expense reports. The first problem to tackle is the format in which employees make their expense reports. Make sure every employee uses the same format; this will make the accountant’s job much easier!
If employees use an end-to-end solution or an add-on to existing accounting software the reporting process can be automated pretty easily, and all of your expense reports will be in the same, easy to use format.
How to handle the lack of spend control?
The answer to this question is related to the poor visibility in business expenses. When your accountant doesn’t know what categories or projects are eating into the budget, it’s impossible to manage the spend.
The solution to this problem is the same solution used to reduce the expense reporting cost. When your company uses a system that digitizes receipts, this means that these expenses are visible to the accountant or CFO, even without submitting an expense or reimbursement report.
Based on these real time insights, the CFO has powerful tool that he can use to control business spending.
How to eliminate manual and paper based processes?
Cloud based web and mobile applications are on the rise when it comes to expense management. As a company you can leverage the use of these apps to keep track of company and employee expenses without any manual input and paper-based reports.
Besides the ability to digitize receipts, manage expenses and generate reports, these apps can handle the complete approval flow of expense and reimbursement reporting.
Solving the four problems above will give your company a step ahead of your competition. By improving the expense reporting process, companies will experience a range of benefits:
– Cut on expense reporting costs
– Faster and more accurate reimbursement
– Improved visibility of expenses
– Less paperwork and manual input
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