Every business, regardless of type, is likely at some point to reimburse its employees for travel or entertainment out-of-pocket expenses. An in-place expense management system is a crucial component to generating smooth reimbursement operations. This system should not only create an easy submission and compensation process, but it will also provide an audit trail that keeps the business in compliance with all governmental regulations. To streamline this process, many companies now elect to utilize expense management software rather than rely on the manual tracking method.
What Is Expense Management Software?
Expense management software allows businesses to track their employee expenses from start to finish, including expense claim, authorization, reimbursement, audit and reporting. The primary goal of this software is to give companies a centralized location to track expenses as a means of improving efficiency and accuracy. This software is typically delivered as a SaaS platform to keep setup and implementation straightforward.
Benefits of Expense Management Software
Years ago, businesses had no option but to manage employee expenses manually. This system is considered outdated today, and many companies understand the benefits they can reap by using expense management software. Below is a look at the top benefits that business can obtain with this type of software.
Expense management software cuts down on paperwork, and it makes the entire submission and reimbursement process easier and faster for the employee and the accounting department. In a recent study, 47 percent of manual-method businesses ranked losing receipts as their number one headache. Expense management software minimizes this problem by allowing employees to use their mobile device to capture and submit expenses instantly. This convenience, in turn, improves employee satisfaction.
Compliance improvement is one of the best benefits of expense management software. Easy-to-understand software prompts ensure that everything is completed properly prior to submission, and a centralized tracking system offers an ideal platform for identifying compliance issues. University of Colorado’s Assistant Vice President, Sandy Hicks, noted how she “found that expense management systems that are easy to use also promote policy compliance and yield enhanced data accuracy.”
Less paperwork, greater accuracy and a faster turnaround time all equate to cost-savings for businesses. A recent study shows that the utilization of expense management software can reduce a company’s overall processing expenses by as much as 75 percent. Even companies that experience minimal travel and entertainment expenses will find that implementing a software tracking process saves them money in the end.
Many businesses evaluate their employee expense accounts by only looking at the bottom line. Expense management software allows business to analyze these expense accounts with more scrutiny. Rather than only seeing how much money is spent monthly or annually, management can break these numbers down further, such as by type, employee or department. This analysis gives all levels of management a simplified method of tracking employee expenses.
Expense management software simplifies the employee reimbursement tracking system, while strengthening accuracy and compliance. Companies that handle any level of employee travel and/or entertainment expense reimbursement should consider making the switch to an efficient and easy-to-use software tracking system.
G2 Crowd helps businesses determine which leading expense management software is ideal for their company, by offering detailed, accurate and impartial software reviews. Companies can use these reviews to discover the pros and cons of different expense management software platforms on the market today.