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Features Resources
For new business owners, managing expenses has always been difficult. At first, it seems doable, but as your business expands, it becomes out of control.
Accounting professionals dislike companies that overburden them with manual labour. Thank goodness the digital age is upon us. Businesses might adopt technically sophisticated expense management software like TrackoField to expedite work completion.
The best part is that small businesses can use it successfully. It reduces the need for human interaction and manual labour. Choose an expense management software that offers all the right features and integrates seamlessly with other payment processing software.
What is Expense Management?
Expense management is the multi-step process of handling expense reports, authorizing expenses, and processing employee reimbursements.
These are just a few phases in the process of managing expenses, though. Expense management also includes auditing spending, and figuring out how the business will disburse employees, and drafting reimbursement and spending limits.
Most businesses manually manage their expenses using spreadsheets and paperwork or use expense management software to automate the process.
For businesses, expenses can take many different shapes. These four general types best describe them:
- Variable Expense: These expenses vary each month. Telephone bills, water, electricity, and other utilities are variable expenses
- Fixed Expense: As the name suggests, this includes fixed expenses such as salaries, rent, insurance, etc.
- Periodic Expense: Expenses that do not occur regularly and occasionally come under this category. Some examples of periodic expenses are repair costs, license renewals, SaaS expenses, etc.
- Discretionary Expense: Expenses made at the sole discretion of the management are called discretionary expenses
Types of Expense Management
Companies resort to multiple ways to manage expenses. Here are some of the most common expense management types:
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Paper Forms
Paper forms are the way to go if you are looking for an inexpensive and manual way to manage expenses. However, there is a downside—this type of expense management negatively affects your organisation's efficiency.
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Spreadsheets
Some companies use spreadsheets to manage expenses manually. In this type, paper receipts are added along with the spreadsheet.
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Software
Expense management software, like TrackoField, is the best choice to manage your organisation’s expenses efficiently and effectively.
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Traditional vs. Automated Expense Management
Automated expense management surpasses traditional approaches in efficiency. The following are some areas where automated expense management performs better than conventional expense management techniques:
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Errors
Most expense management software uses OCR and automatic expense capture features. Therefore, manual errors in an automated expense management system are fewer. On the other hand, traditional expense management systems are infamous for such errors.
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Expense Fraud
Let's agree to that. Outmoded and antiquated expenditure management systems provide as a haven for expense fraud. Workers will find it easy to take advantage of this method's weaknesses and submit fictitious expenditure reports. Simultaneously, the automated software's policy checks will effectively identify false expenditure claims.
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Compliance
You can automatically define policies and identify reports that don't comply with policies with automated spending management software. This will boost your company's policy compliance. To ensure compliance, the finance team must review each and every expense report in the case of manual expense management systems.
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Approval Time
Approval processes are faster in automated systems than in traditional methods. In the traditional method, the process is lengthy because of errors and cross-checking done by managers themselves, whereas in the automated process, it is quick as the procedure is handled by technology.
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Real-time Data
You can access real-time expense data using an automated expense management system. Depending on departments, vendors, categories, etc., you can view the expenses as a CFO. You can then utilise this data to forecast the budget and manage spending. Conventional expense management systems do not permit this.
Challenges in the Expense Management Process
Here are the top challenges in the expense management process:
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Unclear Expense Policies
Uncertain cost policies will cause your organisation to face many issues. Uncertainty about the kind of expenses permitted will undoubtedly cause employees to make mistakes when submitting claims for reimbursement.
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Poor Expense Visibility
Without access to information and expense data, organisations will be unable to make important decisions. For instance, you cannot bargain for better prices with a vendor if you are unaware of which vendor conducts the majority of your business dealings with them.
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Inefficient Process
Is your company's expense management procedure effective? Is it capable of handling hundreds of your employees' filed expense reports? If not, now is the moment to employ effective technology to speed up and eliminate errors from the process.
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Delay in Employee Reimbursement
How long does it typically take your company to refund employee expenses? Your employees' morale and productivity will eventually suffer if your finance team takes an eternity to pay the claims.
Best Practices to Streamline Expense Management Process
Here are some of the best expense management practices that CFOs and finance managers must know:-
Create an Expense Policy
An expense management policy aides effective spending management. An organisation's expenditure policy outlines the costs paid and those not, how employees will get their reimbursement, and other pertinent details.
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Expense Management Software
Manual expense management procedures take a lot of time and effort. The secret to effectively controlling your spending is selecting the appropriate software. Examine the features and costs of every spending management product available in the market.
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Automated Expense Audits
Expensive management systems with automated expense audits will flag fake bills, duplicate claims, and fraudulent reports immediately. To address cash leakage in your company, select an expense management solution that has this function.
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Corporate Credit Cards
Corporate credit cards make reconciliation a breeze. It speeds up expense filing, reporting, and reimbursement processes.
What is Expense Management Software?
Expenditure management software eliminates manual labour from your organisation's expenditure reporting, processing, and reimbursement process while streamlining the overall process.
Furthermore, expense management software like TrackoBit guarantees error-free, swift and easy expense reports in your company. Goodbye, delayed reimbursements!
Why Do You Need Automated Expense Management Software?
From 100% expense tracking to faster reimbursements, TrackoField’s expense management software has multiple benefits. Let us take a look at some of them:
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01. The Efficient Expense Reporting Process
Nowadays, almost all expenditure management apps have OCR integrated. Thanks to this technology, your staff will effortlessly submit paperless expenditure reports while on the go.
Furthermore, automated spend management systems will automatically complete the expense report and record costs from many sources, including invoices, texts, emails, and more. After checking it once, employees merely need to click once to submit it.
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02. Create Custom Automated Workflows
Thanks to automated bespoke workflows, employees no longer need to remind managers and the finance department to approve expense reports on a regular basis. Workflows can be automated to remove obstacles and expedite the reimbursement claim procedure.
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03. Technicians Mobile App
Technicians or executive apps, installed in field service employees’ devices empower them with tools and functions that enable them to fulfill service requests promptly.
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04. Toolkit for Field Executives’ Reporting
Note that some service scheduling apps are standalone solutions that just offer shift scheduling features. But when you choose cloud-based field service management software like TrackoField, you enjoy a complete field service management software wherein you don’t just arrange shifts but also:
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Key Features of Expense Management Software
Companies resort to multiple ways to manage expenses. Here are some of the most common expense management types:
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Easy Submission and Approval of Reimbursement Claims
Bid farewell to the agonising task of keeping month-old invoices in anticipation of payment. Expense management software allows employees to digitally input invoice photographs and expense claims for automated expenditure reporting. It also provides real-time notifications to the appropriate approvers for extremely quick approvals, simplifying the expense approval process.
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Hierarchy Approval
Expense management software streamlines the reimbursement process by enabling prompt review, evaluation, and acceptance of requests by all managers within the multi-level approval structure.
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Tracking Real-time Status of the Claim
The cost management system tracks every occurrence, from expense claims submission to their approval. Executives can check the real-time status of their claim requests on the app. Managers who are involved in the process are notified instantly when a claim is submitted, and they can promptly approve it.
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Reporting and Analytics
Business expense tracking is made easier with a live dashboard that offers real-time updates and automated expense reporting. Expense management software like TrackoField also creates expense category reports, which help managers gauge where the employees are incurring the most expenses.
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Accounting Software Synchronization
Business expense software can automate bookkeeping like never before, eliminating tedious manual data entry and spreadsheet operations. Elite expense management software can be easily integrated with most of the world's best accounting systems. TrackoField is readily linked with popular accounting software such as Netsuite, Quickbooks, Xero, Deskera, MYOB, Zoho, and Tally, and it keeps updating data in real time.
Benefits of Using an Expense Management Automation Software
The features of expense management software help employees and managers in different ways. Looking that way, here is how it benefits both groups.
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Management
01. Receipt Management - Users don’t have to find storage solutions to keep their financial and accounting records safe. The app can safely carry them and store them in the cloud, where no one can access them.
02. Approval Workflow Automation - They won’t be answerable to anyone when a vendor gets annoyed due to a late payment. In a unified platform, they can see the pending requests and approve them immediately.
03. Compliance with Policies - Sticking to regulatory measures without the help of automated software is a headache. The product will take care of this, reducing the stress on the management.
04. Digital Audit Trail - Finding the reason and history of expenses is very simple. They can access audit trail logs instantly and track payments in a second. Accessing related receipts and proof to validate the expense is also possible.
05. Accounting Integrations - Management can finally achieve continuous closing and keep the accounts synced. They feel more comfortable working with updated data and applications.
06. Real-time visibility into expenses - There is no need to check with accountants regarding payment statuses. They can directly check in the dashboard and find the status. The same applies to processed payments also.
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Employees
01. Easily automated Data Extraction - Employees have to put in extra hours and labor for basic data entry. They can be relieved from that and save time. Instead, they can choose to sync or not sync an expense and move it to another application.
02. Unlimited Scanning of Receipts - There are certain times when businesses receive huge numbers of invoices, and accountants work hard to update and process them. However, bulk upload and unlimited scanning are features of expense management software. It takes a few seconds to do these.
03. Mileage Tracking - In companies where employees get travel mileage, mileage tracking can help a lot. This involves using a mobile app. Turn on GPS while commuting to the workplace or work-related events. This app will calculate the distance traveled and mileage, record it in the app, and transfer it to the payments section. This also helps management to maintain fair expense reporting practices.
04. Mobile Apps to help report expenses - Employees don’t have to store their receipts. They can open the mobile app and upload receipts to initiate reporting.
05. File Expenses in Bulk - Employees who travel often will have many receipts to upload. In such cases, uploading them one by one and submitting reporting is easy. Following up can be done in seconds.
Conclusion
Manual expense reporting is laborious for field employees, businesses, and finance teams. It’s expensive regarding work hours spent on expense report submission, approval, and dealing with policy violations. An efficient expense management application eliminates all these challenges by streamlining the entire process end to end. It is crucial to pick an expense management system that incorporates all the key features you need and is robust and easily configurable.
That’s why we’ve built TrackoField’s expense management software that helps employees upload reimbursement claims from the field, and managers can approve or override them remotely. With TrackoField, you can automate expense report creation and submission, create and customise multi-level approvals hierarchy, and issue swift reimbursements.
Try our expense management software for free today to stay on top of your business expenses.