Automate Your Expense Process For Cost Control

6 minutes reading time

Expense automation

Business travel and expense management is a careful balancing act between cost control and spend management. In other words, reducing costs while ensuring that your spend works for you and brings you revenue.

While the days of 1st class transatlantic flights are mostly over, your expense policy shouldn't make people's lives unpleasant for the sake of saving a couple of (hundred) euros. Because flying Economy on a business trip from Europe to New York is not a recipe for corporate success.

A manual expense process has both direct and indirect costs on your organisation. We have rounded up key points to keep in mind when automating your process to ensure it keeps your spending low and your returns high.

1. Automated expense processing costs are low

An often quoted (though ten years out of date) Aberdeen report puts the cost of manually processing an expense report at an average of $29.38. A half-decade old GBTA study puts it closer to $58.

Getting an exact estimate is tough, and the difference in the figures speaks to how challenging manual expense management can be.

Whatever the cost, it is higher than with an automated expense management solution. Whether your employees are expensing a sandwich or a new laptop, you are paying an extra $30-60 for that item through manual processing.

You may think that every single expense report must be manually controlled by a human. In fact, many business purchases are straightforward or could be pre-approved. Renewing a software subscription, buying a new mouse or expensing a “Get Well Soon” arrangement shouldn’t require $30-60 worth of manpower.

Multiply that by every expense report your employees submit: do you still think “the current process works fine”?

Automated expense management costs the same per report, whether it has one or 12 lines, giving you greater control on costs. And those costs are a fraction of the cost of manually creating, submitting and controlling an expense report.

2. Automated expense processing is fast and reliable

Part of the cost involved in processing expense claims is the manpower it requires.

Mid-level financial controllers in Belgium make on average €53,849 gross per year. For the company, this represents a cost of around €80,000. Every hour that a financial controller spends processing expenses rather than on higher value tasks costs the organisation €40.61.

If this does not seem like a lot, multiply it by 20 minutes, the average time it takes to process one report. Then again by the number of expense reports your employees submit. You will soon realise the cost is higher than you may have thought, and more difficult to control.

Let’s do the math. Imagine you have 200 employees who each file on average 1.5 reports per month, according to our own statistics. That's a total of 300 reports to process each month.

  • 300 reports/month x 20 minutes/report = 100 hours/month
  • 100 hours/month x €40.61/h = €4,061
  • €4,061 x 12 months = €48,732/year

As a mid-sized company of 200 people, you would be spending €48,732 per year on expense report processing. That’s a whole year’s salary for a junior controller! This figure doesn’t even take into account the +/- 20% of reports which get sent back due to errors or missing information.

Intelligent solutions such as SpendContoller automatically control expenses while selecting a sample of reports to be manually controlled, ensuring that you meet your control objectives. This combination reduces the time spent processing expense reports by up to 90%, meaning a savings of almost €44,000 for a mid-sized company!

With automated expense management, processing an expense report takes under 5 minutes. And that’s when you even need manual control.

3. Automated expense management supports happy employees

An often overlooked issue with manual expensing is the time it takes employees to submit their reports. Receipts end up crumpled in a jacket pocket only to surface when the jacket is dry-cleaned.

This can create pressure on a company’s cashflow. Instead of regularly reimbursing expenses, the company finds itself paying for months of expenses at once. And this batch payment often happens at the most inopportune time, such as the year-end financial closing.

Besides the cashflow problems this can cause the organisation, consider how your employees may feel. When those receipts resurface, the idea that the company owes them money can cause resentment or feelings of disenchantment. Regardless of the fact that they are the ones who forgot to submit their claims! You wouldn’t want to lose your best employees over a bunch of forgotten receipts, would you?

With mobile expense management, employees capture and submit receipts on the go. This means that nothing is left to the last minute. Reimbursement occurs faster making for happier employees. And you have better cost control.

4. Automated expense management drives compliance

Taxes and regulations have a habit of changing. If you’re not in the business of keeping up with them, doing so can be a challenge. And the challenge grows with the number of international entities in your organisation. Between Germany’s 3-month rule and Spain’s online VAT declaration, cross-border regulations can be tough on your compliance.

With manual expense management, it’s up to your controllers to know all the applicable rules in the different countries. They also need to track how much each employee has spent on a certain category in the past. This can lead to costly issues with regards to legal and business compliance. It can also allow fraud to make its way through your organisation.

Mobilexpense’s Compliance Department proactively researches tax rates and regulations in customer locations. The data is uploaded into the system, ensuring that all expenses processed via the application are held up to the highest compliance standards.

The system also tracks all spending, keeping it in line with the company policy and alerting users of non-compliance. This improves your cost control and reduces the probability of errors and fraud.

5. Automated expensing allows for automated reporting

Say it with us: you cannot manage what you cannot measure.

With a manual expense process, reporting becomes a mission of cross-referencing spreadsheets, creating macros and double-checking formulas for dreaded “#VALUE!” cells.

To stay on top of your oranisation’s spend management, you need clear, accurate reporting. A secure, cloud-based system does exactly that in a few clicks.

End users should be able to easily access insights on their own settled expenses per category, payment method or amount. Administrators and controllers require a broader view on the entity’s settled data, including spend per employee and total amount spent in the highest spend category, for example. They also need to have access to detailed reporting on any vertical available in the system for cost control purposes.

Analysing data, tracking receipts and filing claims should be easy and intuitive. Mobilexpense’s top spend dashboard and advanced reporting allow you to do exactly that. You have access to high-level insights as well as the possibility to drill-down into them to make data-driven decisions.

Your travel and expense process should support your business, not burden it. Manual expense management does not offer the cost control opportunities of automated solutions. With an appropriate policy, automation transforms your expense management from a cost center into a cost control measure.

How it works step 1

Book an appointment now with our expert to find out how mobilexpense can help you automate your expense process and control your costs.

Book now

Posted on 26 Jul 2021