Why Expense Management?
When we visit our clients we often find that the processing of employee expenses is a significant, time consuming and labour intensive task. Yet it is surprising to see how many do not yet have fully automated employee expense management software in place, relying instead on spreadsheets or even paper forms to get the job done. Expense management does not seem to always be high on the list of priorities for Accounts and IT departments. Consequently, many companies do not seem to have a clear view on how much is being spent on travel and entertainment expenses and fail to realise the potential cost savings of getting it under better control.
The report “Guide to Travel and Expense Management 2013” by Aberdeen Group reveals that an average 10% of a company’s expenditure is on travel and expenses. For those with a significantly large mobile workforce it may be even higher. The top 4 challenges facing companies are listed as:
- Poor visibility of travel and entertainment expenditure.
- A need to reduce the processing costs of expense claims.
- A lack of control over expenditure and policy enforcement.
- A need to eliminate manual processes.
What does it do?
There are many different employee expense management solutions on the market, but the top class solutions, such as those offered by Eclipse will offer at least some of the following features:
- User-friendly, intuitive web-based interface.
Flexible policy enforcement – employees may be assigned to groups based on location, department or position in the organisation and these may determine which policies and rules apply to them.
- Fully configurable business rules and workflow – it should be possible for the system to be easily configured by an administrator to allow changes such as new expense types, new policy rules or variations in workflow to be adopted without having to revert to the software supplier for code changes.
- Automated approval mechanism – expense claims may be rapidly forwarded to the appropriate managers for authorisation and then on to Accounts Payable, thereby reducing delays and allowing employees to be quickly reimbursed.
- Digital receipts – scanned images may be attached to electronic expense claims to allow them to be checked by approvers and the Finance departments, again eliminating delays waiting for paper receipts to arrive.
- Integration with travel booking systems – the best expense management solutions are fully integrated with online booking tools, thus allowing booked travel expenses such as airfares and hotel bills to be automatically incorporated into an expense claim.
- Integration with corporate credit card systems – employees’ monthly credit card statements may be automatically uploaded into the expense system so that all they have to do is fill in a few more details for each transaction.
- Comprehensive reporting – integration with Business Intelligence tools to give complete visibility on where the money is being spent, and by whom.
- Mobile – a fully functioning interface for mobile phones and other devices. This is particularly important for employees who are frequently “on the road”. No longer do they have to wait to get back to the office to file their expense claims!
What are the benefits?
Assuming the right solution is selected and carefully implemented, a company will soon realise a good ROI in some of the following ways:
The ability to implement clear, unambiguous expense policies and to automatically enforce them, thus reducing abuses of policy whether intentional or not.
- Flexible policy enforcement, with rapid changes to business rules and approval mechanisms being possible whenever needed.
- A faster end-to-end process, allowing expenses to be claimed, approved and paid within a matter of a few days, rather than weeks, thus making better use of resources and providing a happier workforce.
- Complete visibility of expenditure for the Finance Department and for budget holders. Benefits include seeing where the costs are incurred and by which employees. Areas for spend reduction can be identified, better rates can be negotiated with suppliers and frequent policy violators can be identified and dealt with!
Although employee expense management is an often neglected area, the difference it can make to any organisation is potentially huge. The Aberdeen Group report shows that those who have implemented it well have 90% of their business travel spend under control and a policy compliance rate of over 80%. With results like these surely this is an investment worth considering?
Feel free to check out our solutions page for more details of our recommended employee expense management solutions.
For further information, or to discuss your expense management requirements please feel free to get in touch: