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From manual to modern: the advantages of automated expense reporting
Key takeaways
Manual expense reporting is inefficient leading to errors, slow reimbursements, high costs and limited spending visibility.
Automated expense reporting boosts efficiency by streamlining workflows, reducing errors, enhancing policy adherence and accelerating reimbursements.
Automation also lowers processing costs and provides real-time data to optimize corporate spending.
The challenges of manual expense reporting and management
After a business trip, it’s rare to hear any employee state they can’t wait to file their expense report. Let’s face it: Having to compile and scan receipts, manually enter and itemize expenses and hope you assigned incurred charges to the right expense type is neither easy nor efficient. Manual expense reporting often results in keying errors, slow reimbursements and delayed expense visibility.
Business travel has evolved significantly, with flexibility, real-time support and seamless expense management becoming top priorities for companies and employees alike. Organizations are increasingly turning to digital tools to enhance traveler independence, improve adherence to travel and expense (T&E) policies and provide solutions for managing travel expenses efficiently.
It’s no question that it takes a considerable amount of time to complete an expense report. If the adage that time is money is true, then the opportunity cost of manual expense reporting could significantly cost your organization. Consider the following issues with manual expense reporting:
Creates more work for everyone involved. From entering and itemizing expenses to organizing and submitting receipts, the process is slow and tedious. And if an employee travels often, the pain is multiplied. Not only are manual expense reports a chore for the traveler to complete, but they also cause additional work for those who need to process them. It takes time to review expenses and cross check them with company policy. If there’s an issue or decline, often the submitter’s manager must intervene.
Diminishes spending visibility. It’s hard to provide a complete, accurate spending picture using spreadsheets. Without access to consolidated, correct, real-time data, any kind of analysis or forecasting is difficult. As a result, your organization might miss opportunities to negotiate volume discounts with key suppliers or align expense management strategies with organizational goals.
Manual expense reporting also makes it difficult to enforce your organization’s T&E policies. A lack of visibility into all transactions makes it hard to view spending patterns and recognize nonadherence, as well as possible fraudulent behavior.
Results in high processing costs. The expense reporting process differs from organization to organization. But one thing is certain: The cost to manually process an expense report is often significant. Add in the additional time it takes to correct an expense report with errors and the cost per report can skyrocket. To calculate what your manual expense process costs you, SAP Concur devised the following formula that looks at the total number of hours spent on expense reports processed in a year:1
Hours spent annually on expense reports
Multiplied by the average hourly rate of your processing staff
Divided by number of expense reports per year
Equals cost per report
Increases the approval and reimbursement timeline. Manual processes, by their very nature, are often inefficient and time-consuming. Any misstep in the expense reporting process could cause significant delays with approval and reimbursement. For example, entering one item incorrectly or forgetting to attach one receipt could invalidate the entire report. The report is then returned to the submitter, fixed, and resubmitted increasing the processing time.
Likewise, a request to approve an expense report could become lost in a manager’s inbox or missed entirely if the approving manager is out of the office or on vacation, thus extending the timeline even further.
Expense report automation is not just a convenience – it’s a necessity for businesses looking to modernize their financial operations.
The advantages of automated expense reporting
Now is the time to invest in technologies to help automate expense reporting. Though it may seem costly at first, in the long run, expense report automation is less expensive and more efficient. Not only do processing costs drop significantly, but the ability to identify and address fraudulent expense reports increases considerably.
A commercial card program should be the first step in expense automation because it simplifies tracking and speeds up reimbursements. Instead of employees collecting receipts and filling out reports, transactions are automatically recorded, reducing errors and saving time. A commercial card program also helps enforce policies, allows for better insight into spend and makes automating the rest of the expense process much easier and more effective.
For even greater control and security, virtual credit cards provide an added layer of efficiency in expense automation. Unlike physical corporate credit cards, virtual cards can be issued for specific purchases, vendor, or time periods, minimizing the risk of fraud and unauthorized spending. Virtual credit cards also integrate seamlessly with automated expense reporting systems, ensuring that transactions are categorized correctly and reconciled in real time. By incorporating virtual credit cards, businesses gain improved oversight and greater flexibility in managing employee and vendor expenses.
Streamlines workflows and improves efficiency. Automating expense reporting eliminates redundant, time-consuming tasks. Employees no longer need to scan and upload receipts manually and expense items can be automatically categorized. Travel expense reports can be submitted in real time and approval workflows ensure faster processing.
Reduces errors and improves compliance. By automating expense reports, businesses can enforce adherence with corporate policies more effectively. Expense management software applies company rules automatically, flagging policy violations before submission. This significantly reduces the chances of incorrect or non-compliant claims, leading to fewer rejected reports and resubmissions.
Enhances real-time visibility into spending. With automated expense reporting, businesses gain a centralized, real-time view of expenses. This visibility allows finance teams to analyze spending patterns and trends, ensuring better forecasting and budgeting. Additionally, organizations can use this data to negotiate better rates with vendors based on actual corporate expense report insights.
Speeds up reimbursement and approval timelines. Employees no longer have to wait for lengthy manual review processes. Automated systems integrate with corporate credit cards and travel booking tools, automatically populating expense data into reports. This minimizes back-and-forth communication between employees and managers, ensuring faster approval cycles and quicker reimbursements.
Lowers processing costs. Expense report automation reduces the labor-intensive steps associated with manual expense reports. By decreasing the time spent on data entry, reconciliation and auditing, organizations significantly cut down on processing costs. Many companies see a measurable return on investment (ROI) through reduced administrative expenses and improved efficiency.
Improves employee satisfaction. Employees want to focus on their work, not on filling out complex travel expense reports. Automated expense reporting simplifies the process, reducing frustration and allowing employees to dedicate more time to value-added activities. A smooth, seamless expense management system gives your employees the gift of time, enhancing productivity and improving overall job satisfaction.
Expense report automation is not just a convenience – it’s a necessity for businesses looking to modernize their financial operations. By transitioning from manual expense reports to automated systems, companies can significantly reduce inefficiencies, cut costs, and enhance overall compliance and visibility. Investing in automation today means creating a smoother, more transparent, and more effective process for tomorrow.
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