4 Big Reasons why a Software Should manage your Employees Expenses
Introduction
If there is one thing that every company across the world can unanimously agree on, “it is the fact that Managing the company's employee expenses is a grueling job.
A lot of companies have shifted to computer software, if you are someone who runs a firm and still computes expenses manually, here is a fact for you.
According to the Global Business Travel Association, the cost of manually processing one travel expense report of one employee costs $58. Now, if you think that you run a small firm and the cost does not matter, a report by the Aberdeen Group disagrees. That report, about companies with less than 1000 employees, says that considering your firm manually processes 500 expense reports a month, you incur a cost of $210,120 every year. However, the same firm, when using automated expense management, saves over $54,000 a year.
And this was just the tangible work cost that was taken into account. Many other factors come into play and make a significant difference between processing your expenses manually and having an automated expense management system. This in result helps in smooth bookkeeping and accounting. Here are four big reasons why you should consider shifting to an automated setup:
Reduce chances of errors and mistakes
If there is one job that your accounting team absolutely hates while using cloud based software zoho books or quick books, it is when they have to go through all your expense reports for the month painstakingly. Not only is this job exhausting, but it is also prone to hundreds of unforced errors due to the monotonous nature of the job. Handling that amount of paperwork efficiently and effectively is almost impossible.
An automated system will get rid of the paperwork entirely, and if there is no paperwork, there is no chance of errors due to the paperwork. In an automated cloud based expense management software like zoho expenses or expensify , your employees will simply need to take a picture of the expense receipt and upload it to the software.
The software will do the compilation and prepare the report, and your finance and accounting outsourcing team will be able to focus on other essential parts of their job.
Eliminate the Chance of Expense Fraud
Manual management of expenses is no less chaotic than the floor of a stock market before the internet. If you have employees looking to defraud you, they will be easily able to do that in the midst of all the expense management chaos.
This type of fraud happens when rounding up of expenses or multiple submissions of a single receipt and might seem insignificant at first. But over a period of time, when more and more employees start committing expense fraud, it becomes a big problem. And it is impossible to trace the fraud back to the employee because of the utterly tumultuous process of manual management.
Of course, with an automated system in place, all of this would vanish immediately. Online expense management software has a number of built-in checks and review systems to prevent any fraud or error. They also maintain a clear paper trail for every expense entered into their systems and can trace any attempted fraud to the guilty employee.
Enforce Policy Compliance
As a CEO or owner of the firm, you would want your employees to adhere to the expense policies that your firm has. However, enforcing policy compliance is almost impossible through manual expense processing. The entire process just too unscientific and data-heavy. It would require hundreds of man-hours for your finance team to go through each expense and check it against the compliance policies in place. Needless to say, this process also has a huge risk of errors made by the Accounts Outsourcing team and can cost you a lot of money.
In case you hire a cloud based bookkeeping and accounting outsource firm for your expense management or use a third-party automated online expense processing system, all of these issues would cease to exist. All you need to do is regularly update your firm's expense policies on the software.It will automatically pick out violations and trace back the violation to the employee, leaving your finance team enough time to look after their other duties.
Keep track of Your Expenses
When you have a manual system of managing your expenses, it becomes challenging to track those. Of course, you will know the total expenses incurred over the period, but you will not be able to study the details. Going through the specifics of your expenses is extremely necessary while running a firm or a company.
As the owner or CEO, you will always have to reduce your finance operational cost, and that is impossible when you are processing your expenses manually. Almost all expense management systems have data management and analytical tools that will analyze and present to you, the specifics of the expenses incurred.
Most such software also generates separate reports on expense allocations, policy violations, expense limits, and reimbursements. This software not only gives you an understanding of your employees' spending pattern but also allow your finance team to tweak policies and ancillary associations with vendors to reduce costs further and increase efficiency.
Conclusion
There are many mistakes that firms make while figuring out their expense management systems. Most manual expense management systems are not planned out properly and cost the firm thousands of rupees annually. While buying and using automated expense management software's are the best solution to this problem, another hassle-free idea would be to outsource the expense management to a consultant.
There are hundreds of high-skilled professionals who manage expenses for companies using automated software. This method is cost-effective and makes sure that your finance or accounting teams do not have to focus on employee expenses.
The Quickbooks accounting service firm can generate all your reports, and you and your employees will eventually save a lot of time and money while getting the same benefits as from an automated system. Please feel free to contact us for more details.
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