Handling business expenses manually is inefficient
Traditionally, business expenses are done manually at the end of the month. Employees list their expenses, allocate receipts and codes to each expense, and submit the list for approval.
Often a bookkeeper or accountant is involved. And payment or reimbursement typically happens weeks after the original expense was incurred.
Many companies still process their business expenses this way – but it’s inefficient. There’s a lot of handling. It takes time. Employees wait around to be reimbursed. And you don’t have a clear view of cashflow.
Getting an automated business expense reporting can solve these problems for your business. Staff can lodge expenses immediately online. Business owners can track expenses, apply company policy, set up approvals and generate reports.
What is real-time business expense reporting?
Real-time business reporting means submitting and reimbursing expenses faster, keeping your accounting data in sync, and having instant visibility of cashflow.
Five reasons to make the switch
Enjoy the freedom of processing business expenses anywhere, any time. Rarely do we incur expenses sitting at our desk. Usually it’s done while we’re travelling or catching up with clients. That means you and your staff need software you can use while on the move. Real-time business expense reporting makes that possible. At the press of a button, you can check and approve expenses, reimburse someone or create a detailed expense report. It’s that easy.
Process and reimburse expenses faster
Smart expense reporting software can speed up the process – from submitting and processing expenses through to reimbursing and tracking them. You can pay your staff back quickly. It can also help you avoid having to spend time following up on incomplete or wrongly-claimed expenses. A robust system will ask for and accept only complete and accurate data. It will give you the ability to enter an expense as soon as it’s incurred, matching the speed of business without foregoing the necessary checks and balances.
See your cashflow in real-time
You need to know exactly how money is being spent in your business. If there’s a spike in spending, you need to know why. Healthy cashflow depends on it. That’s where real-time reporting software can help. It records and codes an expense as soon as it’s incurred and gives you an accurate view of your cashflow. That means no surprises.
Make better budgeting and forecasting decisions
Budgeting and forecasting depends on up-to-date, accurate information. If your expense reporting is done online in real-time, you’ll be able to run expense reports that help you better analyze transactions and determine your firm’s financial direction. Over time, you can run reports that bring together historical data, making it easier to plan your financial future.
Improve expense policy compliance
Smart software, tailored to your business, will make policy compliance a no-brainer for staff. It all comes down to good design and making sure your software is set up with your expense policy in mind. You might want to schedule an automatic warning to pop up when an unacceptable expense is entered, or block a meal expense when a maximum per diem is reached. Options like this encourage staff to double check the accuracy of their expense claims early in the process and comply with company policy from the outset.
Three tips on what to look for in expense reporting software
Once you’re ready to get rid of your manual system, what’s next? What should you look for?
Real-time reporting software
Expense reporting software tends to fall into two categories – batch reporting and real-time reporting. Batch reporting groups expenses by date into a single report to be approved or declined once submitted. It can be done online, but the expenses are not submitted or synced to your accounting software in real-time.
Real-time reporting, in contrast, is done as it happens. So it matches the speed of business. Use it to code and process your company’s expenses as soon as they occur. See how money is spent. Make sure it gives you an accurate picture of your cashflow on a day-to-day basis. And set it up to create reports that you can use to forecast and budget.
Software that links to your business systems
Software that links to your bank accounts, credit card, accounting software and payroll system will make things quicker and easier overall. Keeping your books up-to-date across all of your platforms is essential to making smart financial decisions.
It's important to know what has been spent, both on corporate cards and in reimbursable expenses as soon as it happens. And you'll want to be sure that these transactions are sent to your accounting software as quickly as possible. Talk to your vendor to find out what your options are.
Optical character recognition (OCR) technology
Some systems today use optical character recognition (OCR) or data technology to convert documents like a photographed receipt into editable and searchable data. It’s great in theory. But it pays to be cautious. Yes, OCR technology can read and create data. But accuracy is often low. That means you’ll probably have to spend time fixing errors, which can be frustrating.
A good solution is to select software that uses OCR technology for recommendations when reconciling bank transactions, not for data entry. A good use of OCR might be to scan a receipt and have your software recommend a matching credit card transaction. The best result is to use OCR technology combined with technologies that identify location (geo-location technology) and automatically code expenses to speed up the submission process.
Automated expense reporting makes good sense
Processing business expenses is part of doing business. It’s unavoidable. We all have to do it. The easier it is and the more accurate it is, the better it is for both employers and employees.
That’s why automated expense reporting is a huge improvement on manual systems. It can eliminate errors, time delays and the overall hassle of reporting. It can streamline the process and improve the quality of your data. Better still, you will have all the information you need to make good decisions and help your business grow.
Need help on getting the right tools for your expense reporting? Get in touch with us