It’s a given that it costs your company each time one of your employees spends for work. But have you also factored in all of the hidden costs involved with unautomated, poor expense management software and processes?
The hidden costs of disconnected expense management software
Let’s imagine your company events manager is taking some team members overseas to exhibit at an event. If your company is still letting people spend with personal cards and reimburse them later, the scenario might play out like this. Your events manager, Robbie, pays for some extra merch for the event stand, and treats a selection of prospects to a post-event dinner. Assuming he paid via his personal card, Robbie has now also paid an additional fee for using it abroad. Anyway, dinner’s over so he chucks the receipt in his work bag along with about 30 others he’s collected so far on his trip.
Robbie’s back in the office now and it’s getting dangerously close to the last day of the month. Marge, one of your finance managers has already chased him to submit his expenses before, and now finally he’s sitting down to go through his receipts and connect them to his expenses. Unfortunately, he can’t find a few of them so he’s forced to submit what he has and hope for the best.
Cue Marge, who is now frantically chasing everyone for their receipts before month-end and can’t focus on any other tasks until she’s got them all in the system. At this point Marge is spending her whole time chasing and it’s not only time-consuming, but it causes friction between her and her non-finance colleagues.
See how much time and money you could save with clever expense management software.
Admittedly, the worst-case scenario example above isn’t that common in most businesses these days. But there are still issues with manual tasks and time-consuming admin. Let’s assume Robbie submitted his expenses correctly and on time (for once), poor Marge is still entering the majority of the expense details manually, as the expense management software her business uses isn’t supported by OCR technology to automate it.
So, what are the biggest hidden costs of poor or disconnected expense management software?
- The employee’s personal card fees
- Your finance team’s time and salary being lost to administrative tasks
- Lack of visible financial data needed to make decisions
How to automate expense management?
If Robbie’s company used an expense management software with company cards, Robbie could have gone on his work trip, paid with his company card, taken a photo of the receipt, and the job would’ve been done.
Moreover, Robbie’s expense is matched with the proof of purchase instantly so Marge and her finance team won’t need to chase him, ever again.
At the end of the trip, Robbie doesn't need to fill in any kind of expense report as all expenses are automatically logged into the platform. For Marge and her team to close the month, they simply need to download the monthly expense report with just a few clicks. As business expenses are a small part of businesses finances, integrations with accounting and ERP systems are key.
Marge and Robbie like the new automation and agree this is the best way to manage expenses from now on. The CFO decides to invest in an expense management software with company cards and Robbie can now organise more events and Marge can focus on optimising budgets.
Now imagine that Robbie and Marge work for you. In this scenario, you've decided to use Payhawk, and automate expense management allowing your finance team to have more time for strategic tasks. How?
With Payhawk, your finance team can see live data of the business' spend and cash flow — and monitor budgets in real-time. Plus, they can download reports with all the expense information and filter by cost centre, team, category, employee, and even supplier.
Book a demo to find out more.
Also, thanks to our AI and machine learning, we will suggest the appropriate data for an invoice and improve recommendations based on your business' spending behaviour.
Your finance staff can now understand how company spending fits into the overall budget because every item is tracked. They can collaborate with team leaders to propose acceptable spending limits and revisions to the spending guidelines, and then change these settings directly in the platform.
Users of your company cards will be able to easily maintain compliance since they can check their spending caps. And when they need to spend additional money they may easily request additional funds with a few clicks, and the designated approval chain for the company will decide whether or not to approve the request.
Every payment is traceable, giving your finance team full visibility and the ability to escalate or recommend solutions for individuals or teams to save money.The tool even includes subscription management software built in, so you can track how much you spend in recurring payments and avoid duplicates or missed payments.
Three benefits of managing budgets with Payhawk
- Eliminate the use of personal cards for business expenses. Thanks to Payhawk team cards, each team member is given a company card that is linked to a certain team budget. As a team, everyone is allowed to spend as much as they need, and it's all tied to the same card limit.
- Reduce overspending. Your finance team can monitor each team budget (as described above) per cost centre to determine how much is being spent on various business functions and to identify areas where costs might be cut or budget modifications suggested.
- Improve and amend budgets. Your team leads and budget owners can view team spending in real-time and make adjustments as needed to keep within the allocated budget. Additionally, they can discover insights to affect future budget planning.
You’ll notice that as your teams start utilising Payhawk, everything improves. Stakeholders can focus on their core tasks without being hindered by the burden of expense administration, and finance teams can concentrate on optimising budgets and controlling business spending.
Resulting in a better and more effective way to conduct business—and that's before we account for the amount of days your employees have to wait to get paid. Book a demo to learn how to increase your company's visibility, morale and profits.