Expense management is the management of all the company spends. This includes both short and long duration tasks like procurement (raw materials, office supplies,infrastructure needs), digital spends (marketing and technologies tools, analysis and reporting), forex (covering international business trips and currency conversions), imprest management (petty cash handling for managing multiple branches) and reimbursement and allowances of employees.
Over the years expense management has evolved from manual accounting to excels and to present day automated tools for reporting.
Expense management has its origins in paper trails and instead of aiding financial professionals it has been more of a black box as far as financial insights is concerned. Organizations used manual means to manage all company spends from reimbursements to salaries. The problem laid in documenting expenses and gaining insight for future budgeting. Also the system was tedious for correction and spotting errors.
Currently multiple organizations in developed as well as developing countries are making the swap from traditional expense management means to automated expense management system.By changing the expense management process, companies today are able to gain valuable insight into spend management trends and leverage their data in ways they didn’t necessarily anticipate. The benefits of which can reach beyond traditional expense reporting functions and result in an overall better experience, including increased employee satisfaction, greater compliance, and reduced spending.
Why is it necessary for companies to raise beyond the manual means of expense reporting , excel sheets and spreadsheets?A sneak peak into the problems related with manual expense management:
1. Time and Money Lost
According to Global Business Travel Association, around 3000 hours annually are wasted in managing and correcting expense reports. The cost involved is higher for larger organizations.
2. Delayed Spend Visibility
Dependency on employees to meet deadlines and correction - rework leads to delay in accounting. No real time visibility defeats the purpose of efficient expense mangement.
3. Expense Frauds
Did you know a company loses 5% of its revenue in expense frauds? And most of the time the lost money is not recovered even after detection.
4.Poor Policy Compliance
Manual expense management allows loopholes in the system leading to non-compliance and cash leakages.
An automated expense management system can ensure complete visibility into company spends. Not only are the cash leakages eliminated , an employer can track employee expenses and limit spends automatically.
Happay is a one of its kind, business expense management solution that streamlines expense workflow entirely (expense reporting to reconciliation) and provides real-time visibility and control over business spends.