Using web-based expense tracking for effective employee expense reimbursement
Expense reimbursement is a critical component of business finance. All firms must keep track of their cash and reimburse employees for their expenses. Managing the reimbursements correctly reduces stress for both the employee and the company. But how fast an expense takes to get reimbursed is a sign of a good business expense management system.
Web-based expense tracking has made it easier where employees no longer have to file expense reports and are responsible for maintaining and collating receipts. And the finance team and managers no longer have to check for reconciliation manually. Hence, this saves you time and ensures policy compliance.
What is web-based expense management?
A web-based expense management system involves recording, tracking, approving, and automating the payment of reimbursable expenses incurred by employees. Finance personnel is often expected to correct errors on expense reports, chase down missing receipts, and explain complicated expenditure reimbursement laws and procedures daily.
But all this is a part of manual expense management. Web-based cost management software aims to make expense management more effortless. A web-based expense management system ensures better receipt management, spending analytics, policy enforcement, giving you control and real-time visibility of your cost reports and financial records.
In a web-based expense management system, tracking starts the moment employees upload the receipts into the system through a mobile app. Once all the data is extracted, employees can create expense reports within a click. Employees submit the expense reports to approvers to review. Approvers can accept and reject the expense based on expense policy. Once the costs are approved, it gets synced to the accounting software. They then go through payment processing, and employees are immediately reimbursed.
Why is expense management important?
The employee expense management system tracks and manages the cost claim, authorization, audit, and payment processes. The software focuses on robust policy compliance to ensure that organizations do not overspend. Employees dislike having to wait months for reimbursement after incurring a cost. Companies may issue those claims swiftly and correctly with appropriate expenditure management practices.
Organizations can streamline and automate their business spending, obtain comprehensive control and excellent visibility, and save costs by generating real-time reports with web-based expense management software. Companies can speed up the expense management process, reduce errors, and distribute reimbursements more quickly by using software to track and monitor employee spending.
Benefits of web-based expense management
Improve visibility
Real-time visibility of your cash flow is essential to maintaining a healthy spending culture. An employee expense management system helps keep track of when and where the company's money is spent. It gives valuable insights with detailed spend analytics about your company's finances. It created substantial reports on expenses, travel, policy violation, reimbursement, and other reports. All this leads to making quick decisions about firms' financial performance.
Prevent fraud
Sometimes employees might submit the duplicate expense receipts twice, which leads to duplication of payment. Automation can detect any duplicate receipts entry and notify the approver to reconcile or delete the expense. By setting up a customized or multi-level approval process, you can increase transparency. As every expense will be reviewed more than once before reimbursing costs, the chance of fraud gets significantly reduced.
Improve policy compliance
Matching every expense manually against the travel and expense policy is daunting. An automated expense management solution detects out-of-policy travel expenses by applying unique restrictions tailored to your organization. Policy violations would be reported to the approvers as soon as they occurred. The finance team can evaluate the expenses' compliance in real-time and accept or reject them with just a few clicks.
Speed up approvals and faster reimbursement
With an automated expense management process, managers can quickly review, verify and approve every expense and eliminate the chances of delayed reimbursement. Once the employees submit their reports, it automatically gets passed on to the approvers, hence reimbursing the claim within a click directly to an employee's bank account.
Eliminate manual data entry
Instantly capture receipts with a smartphone app. Once you take a picture of a receipt, the app collects all of the vital information and fills out the expense report form. Hence, eliminating manual data entry. It also helps flag errors and duplicate payments that might occur while entering data manually.
Drawbacks of manual expense management
Employee dissatisfaction
The lengthy approval process of validating and approving expense reports result in delayed reimbursements which cost employee dissatisfaction.
Human error
Manual data entry leads to errors such as incorrectly filed expense reports, which can sometimes result in duplicate expense reports.
Occupational fraud
Employees falsifying a receipt or claiming personal expenses as professional expenses might lead to occupational expense fraud.
Delayed reimbursements
Lost and misplaced receipts allow for difficulty in matching receipts, leading to delays in reimbursements.
Poor visibility
Poor visibility on where your company's money is being spent leads to lost cost-saving opportunities, and any policy violation can place you at risk of costly audits.
Inefficient process
The manual process is inefficient and time-consuming. It costs employees hours and eats into their productivity, leaving no room for other profitable work for business.
How to choose an expense management system?
Easy-to-use interface
The interface of your expense management system should be simple to use by all types of users, including employees, finance managers, accountants, and so on.
Policy compliance
Software should detect real-time policy violations. It should flag suspicious reports and immediately notify approvers about the breach at the point of expense creation. This helps you at the time of auditing and prevents you from getting into trouble with the tax authorities.
Customizable approval process
Each company has its own set of methods and systems, so get software with a customized approval process. So that you can align your approval process with the hierarchies of your organization.
Complete integration
Software that integrates with your accounting system aids in the simplification and streamlining of your expense management process. This feature saves several hours in matching the transactions with receipts and helps close books faster.
Mobile app
Mobile functionality is beneficial for both employees and the finance team. Employees can submit expenses while on the go with the help of a mobile app. And the finance team can easily access digital receipts and expense reports from any device at any time.
Complete visibility
The system should provide you with full visibility into your spending and suggestions for cost-cutting measures. You can analyze employees' business trip expenses, identify policy violations, and avoid unnecessary costs.
Easy expense reporting
This is an essential feature to look for. A software that allows employees to click and upload receipt images directly reduces half of the admin work. After that, most software offers automatic data extraction, which further simplifies the process.
Customer support
Make sure your software provider must have good customer support service to solve issues at their end.
How can Volopay improve expense reporting with an automated solution?
Corporate cards
With Volopay, corporate cards stop squandering hours approving expense claims. Spender swipes, and the expense is fully coded and synced into the accounting system with a few taps.
Smooth integrations
Reduce expense processing costs by syncing reimbursements with your accounting software. You can use an accounting inbox to prepare and label transactions and verify the information.
Real-time visibility
With complete spend analytics, you'll receive real-time notifications and emails for your transactions.
Easy receipts submission
Receipts are simple to forget to misplace, which later act as a significant stumbling barrier to timely spending reimbursements. A snapshot of a paper receipt can be immediately submitted with a reimbursement request through the mobile app. Receipts then get matched to the right transaction record and populate the reimbursement request details automatically in seconds.
Manage reimbursements
Instead of demanding expense reports, a mobile app that allows you to submit individual reimbursement requests as they occur. Employees don't have to wait until the end of a business trip to fill out an expense request. Each transaction is approved and handled individually at the time of purchase.
FAQS
No, expense reimbursements are not considered as income for the employee. This means giving the employees money back that they spent from their funds. Hence, the reimbursement amount should be reported as a separate item that is not taxed.
Employees no longer have to wait for their reimbursements. Once the receipts are uploaded, employees can get their reimbursement in just a click directly into their bank account. Employees don't even have to wait for five days to get their expense claims.
Managing business expenses is an integral and essential part of any business. Expense management helps streamline the finances, which helps in better business decisions. It increases your organization's overall financial productivity.
An expense management system simplifies your reimbursements, travel requests, and expense reports. In short, the expense management system overtakes the traditional ways of managing expenses, such as paper tracking, filling spreadsheets, and manually approving requests. It reduces the amount of time spent in managing costs and minimizes errors.
Volopay allows businesses of all sizes to eliminate the hassles, risks, and costs associated with paper-based expense processes. The Volopay system is affordable to companies and less expensive than manual expense reporting. It takes away the pain of manual accounting work.