What if there was a way to drastically cut down time spent on expense processes, keep your employees happy, and free yourself up so you can focus on other business-critical tasks?
But when it comes to processing employee expense payments, there’s a good chance that your patience is being severely tested, probably on a daily basis.
Over the last decade, technology has reshaped the workplace. But while tasks like maintaining your company’s general ledger and preparing a profit-and-loss account are arguably less time-consuming and relatively easier to do in 2020, expense processing is still stuck in the 1990s.
As Soldo’s financial director Paul Murphy bluntly puts it: ‘It’s tedious, laborious, time-consuming, and excessively bureaucratic.’
Here’s a look at a typical company’s expense process and what can go wrong at each stage.
Spending money is easy, but that doesn’t mean your employees won’t make critical mistakes. In particular, they may:
Any of these issues will create record-keeping problems and, potentially, disagreements with employees who will expect to be reimbursed despite the issues in their paperwork.
Even astronaut Buzz Aldrin had to prepare an expense report after he went to the moon.
But while the process is necessary, it doesn’t make it any less tedious. In one survey, 43% of employees said they’d pick commuting an extra hour a day over preparing an expense report. And 53% would rather do their taxes.
The upshot is that an expense report may take a while to hit your desk, which will make your job more difficult. As accountant turned money mentor Gail Bainbridge notes:
When I worked as an accountant, people sending expense claims at the last minute was my biggest frustration.
Money mentor, Gail Bainbridge
Late submissions mean you have to make reconciliations and re-balance the books several months after the fact. Manual processes are also prone to human error. And you may not discover a mistake until after you’ve processed payment.
Before you receive an expense report, the employee’s manager has to go through it and approve it. This is extra work.
Busy managers may also miss important details or not be clued up about the finer points of the company’s expense policy. As a result, they may overlook errors or mistakenly approve expenses the company doesn’t allow.
Once an expense report hits your desk, you have to go over it line by line and match transactions to receipts. This is both inefficient – you’re duplicating a task the employee’s manager has already done – and creates other challenges.
For starters, employees and their managers don’t like preparing and approving expense reports, so they’ll probably submit them in batches. This means you can quickly get swamped.
More to the point, unless your accounting system can automatically import spreadsheet data, someone will have to spend several mind-numbing hours inputting everything manually.
You’ve approved the expense report. But how will you make the payment?
All three options require extra admin and come with their own set of problems.
Case in point, payroll isn’t designed for running expenses. It may delay reimbursement even more. Plus, how will you itemise it on the payslip?
Similarly, you can only make bank transfers or cash payments manually. And setting up an employee as a supplier could skew your data.
Spreadsheets, multiple rounds of approvals, and manual data input may have made sense 20, or even 10 years ago.
But, clearly, this process isn’t fit for purpose anymore. It’s burdensome, time-consuming, and frustrating for everyone involved – you, the employee claiming expenses, and the manager who has to approve the report.
Luckily, sticking to this process is no longer necessary. An automated expense management platform like Soldo can:
Here’s what this would look like:
Instead of forking out the money themselves, employees can use prepaid cards for business expenses with a pre-approved spending limit.
With Soldo, you can create restrictions from your dashboard, so employees can’t buy items your expense policy doesn’t cover.
This means managers don’t have to go over and approve expense reports. And you don’t have to check the transactions line by line to make sure they’re compliant.
Even better, employees make payments using company money, so there’s no need for reimbursements.
No more shoeboxes full of crumpled receipts or hours wrestling with Excel. Once the employee pays, they launch the app (after receiving a notification), snap a photo of the receipt, and link it to the transaction. Job done.
You can log on to the dashboard and see expenses across the company at a glance.
Soldo also integrates natively with Xero and with other systems through an API, so it can import data automatically to the accounting software without the labour of manual statement imports.
Employees claiming expenses is one of the certainties of business life. But the process doesn’t have to be a frustrating and burdensome time-hog.
Using an automated spend and expense management platform can cut it down from six or more steps to just three.
PwC reckons automation can slash the time it takes finance teams to do their job by up to 40%.
So, why not put expense processing on autopilot and use your newfound freedom to work on more satisfying and, ultimately, more valuable tasks?