How to improve efficiency with automated expense management

Missed expense management opportunities

Once upon a time, it was all about paper receipts, spreadsheets, and emails. After employees filled out all the paperwork, managers would have to go through each report to ensure that everything was accurate. This process meant spending hours on end looking at receipts and trying to match them with the company's expense policy. The problem with this method is that it took a lot of time to chase, gather, track, and check the expenses.

If you're a finance manager or CFO at a large business or SME, you've probably juggled these outdated processes at some point in your career (maybe you still are). But here are two big reasons that manual expense management should be extinct:

1. Companies lose over £9 billion annually due to employee expenses reported wrongly or not reported. That's money wasted on unnecessary spending, or worse yet, revenue not accounted for. Take the German automotive company ATU, for example; in the first year they used Payhawk for their spend management solution (including company cards and expense management), they saved approximately €2m in VAT tax claims. Before Payhawk, they had missing receipts and no VAT claims.
2. The traditional way of managing expenses also involves a lot of time and effort by employees. There are lots of processes involved which make it difficult for companies to keep track of their expenses. Employees must manually enter each expense, then wait for approvals from their managers and accountants before they can be reimbursed for the same.

Manual processes take up a lot of time but also increase the risk of human error. It's common for employees to make mistakes while entering data, and spending time on it can be highly frustrating. The manual effort removes valuable productive time and affects work morale because employees find it challenging to keep track of their expenses and get reimbursed on time.

Many companies are now turning to automated expense management software to solve these problems and save their businesses money. But how exactly does automated expense management software work? And what can it do for your business?

How to improve efficiency with automated expense management

Whether a small business or a larger enterprise, you must keep track of all your receipts and invoices and ensure that everything is accounted for. And if you have employees who need to submit their expenses, you must give them a way to do so.

Automated expense management can help with all of these things. And here's how it works at Payhawk:

1. You create an account for each person in your organization who will use a physical and/or virtual corporate visa card. These card users will then have access to the platform and can use it to submit their expenses.
2. The employee submits their expense information through the platform via an OCR tool that captures all the data, automatically creates an expense entry in their account and auto-reconciles with their other financial accounts.
3. The employee's job is done once they've submitted their information. And if they still need to grab a photo of the receipt and upload (or upload an invoice), then the expense management tool will automatically chase them to do so.

All of this saves time by eliminating back-and-forth between employees and the finance team about spend and receipts etc.

Improve cards and policies too

Beyond expense management software, your company cards are just as important. And in an ideal world, your spend management solution would include company cards, expense management software, automatic data capture, accounting, ERP integrations, invoice management, and more, all in one place (a'la Payhawk).

Here are our biggest tips:

Use company cards instead of personal cards

When employees use their own credit cards for business expenses, it takes more work to track what they're buying and where they're buying it from. Company cards remove the need for employees to spend on their personal cards, which is a massive benefit. On top of this, your company cards can give you better oversight and control over spend — as long as they're connected to smart expense management software.

Standardize policies across departments

Automated expense management software allows you to create standardized policies for all employees so everyone is on the same page when it comes to submitting expenses for reimbursement. This reduces employee confusion and makes it easier for managers to approve expenses or fund requests quickly because they know exactly what they should expect from each department.

Create templates based on previous approvals

If certain employees always submit certain types of expenses (i.e., junior-level employees submitting per diem reimbursements), you can create templates within your system based on past spend.

In today's competitive market, your business must maintain its edge. Automating your expense management can help you achieve this by 1) giving you better spend visibility to make smart and strategic business decisions. And 2) by giving you more productive time back. Take Payhawk customer Essentia Analytics for example, who reduced their month-end close from ten days to five days. They took so much time back in their finance team that their Financial Analyst has managed to update their role to support the commercial team 50% of the time.

Want to reduce your manual finance tasks by up to 80%? Book a demo today.