Many businesses continue to manage their employee expenses in the same way they always have: fumbling with physical receipts, submitting manually generated reports, hoping that their figures add up right. Fortunately, there are better ways to track business spend.
Expense management is a system used by businesses to make it easier to process, pay and audit certain types of business spend — specifically, expenses incurred by employees, like travel, petty cash and purchases. Because even small errors in expense management can lead to major issues like cash flow imbalances or fraud, it is imperative that business leaders develop a thoughtful and effective expense management process that suits their needs.
The following trends in expense management demonstrate that businesses are moving away from outdated and erroneous methods and toward a faster, easier and more profitable expense management process.
The End of Manual Methods
With traditional expense management, employees are expected to keep track of their expenses with pen and paper. They must handle physical receipts, keeping them safe as they travel, and managers and finance teams are tasked with manually verifying expense reports using an employee’s paper trail. The process is riddled with opportunities for error and all but guaranteed to cause delays in reimbursement, resulting in dissatisfaction and low morale for workers.
It is no surprise, then, that companies are moving away from traditional, manual methods and toward digital expense management solutions. Expense management software has been adopted by over 89 percent of organizations, so to remain competitive, business leaders still muddling through expenses with manual processes should jump on this trend.
Integration of Expense Management Systems
It is one thing to use any old digital expense management tool to facilitate tracking expenses, navigating approval and processing payments; it is another step toward efficiency to ensure that expense management software will integrate with other financial and accounting systems. Expense management processes generate and utilize data that is valuable to other business processes, so it makes sense to invest in an expense management tool that consolidates data and processes into a seamless system. Accounting, finance, sales and other groups all benefit from integration of expense management.
Business leaders should meet with stakeholders to discuss what elements of expense management would be best suited for integration into a broader business system. Then, leaders can develop a plan to transform current processes while minimizing disruption.
Mobility for Employee Expenses
Rarely do employees incur expenses while behind their office computers. Most employee expenses occur when workers are out of office, perhaps while they are traveling, engaging with clients or otherwise doing work away from their desks. Thus, most employees do not have the opportunity to immediately log their expenses in a digital expense management solution — unless that solution is as mobile as they are.
Increasingly, expense management software is able to integrate with mobile apps downloaded onto employees’ mobile devices. This allows employees to escape the need to wrestle with receipts as evidence of their expenses; instead, they can connect their spending to the mobile app, take pictures of receipts or otherwise track their expenses immediately upon making them. This reduces the presence of mistakes in the entire expense management system, creating a smoother path to reimbursement.
Management With AI and Machine Learning
Anyone interested in business trends should hardly be surprised that artificial intelligence is an emerging trend in expense management, considering that AI is one of the most attractive new tools in almost any business field. AI and machine learning can add sophistication to expense management software, helping business leaders and finance teams recognize out-of-policy expenses and avoiding expense report fraud. Because compliance can be such a headache for employees and employers alike, utilizing AI in this way will ease expense-related tensions and facilitate faster, smoother reimbursement. While business leaders explore the possibility of adding AI to their expense management processes, they can consider other ways to take advantage of the machine intelligence business trend.
Business technology is becoming more and more sophisticated, but many businesses remain mired in traditional processes that are preventing them from growing and competing in their market. Leaders should be inspired by these expense management trends to update this small but significant element of their finances, which will have major benefits on business productivity and profitability.