The expense management methodology has evolved with time, from companies making the purchases on employee’s behalf, to employees making business expenses and then claiming the reimbursement for the same. This transfer of trust to employees comes with a responsibility to spend as per the company’s policy and get the claims approved for reimbursement.

Also, the burden comes on HR and finance department to manually manage expense reporting process:

• Collect and verify expense receipts
• Escalate verified expense receipts
• Approval manager scheduling to approve
• Reimbursement approved and pending
• Recording and storing expense reporting data

This complete process takes a lot of time and processing costs which are not even taken into consideration. To make this process effortless and faster, the best expense software is equipped by many businesses. The digital solution not only eliminates all the risks and flaws of manual expense reporting, but it also provides other smart benefits which lures businesses to equip the expense software easily. The increased usage of expense software is evident as the global expense software market is expected to reach USD 6225.9 million by 2025.

Here’s why businesses are increasingly using expense software in recent times.

1. Accuracy In Reporting

Manual entry by so many employees in one spreadsheet leads to many errors like wrong figures, wrong formulae, wrong column added, etc., which can be corrected only by the finance team. For example, an incorrect entry in a column, or a negative sign instead of positive one can affect multiple spreadsheets, and eventually it will take hours and days to detect the source of the error.

Automation through expense software has in-built smart features like receipt scanning, credit-card integration, data extraction, etc., which ensures accuracy and detects errors in the spreadsheets and corrects it without any manual intervention.

2. Faster And Cost-effective

Automated expense reporting has the major benefit of reducing processing time and costs. With manual expense reporting, you need to process a big amount of data through a long chain of people verifying and approving and reimbursing the expenses.

Here, employees just upload their receipts which are automatically verified and forwarded to the approval manager for approval immediately. Also, you don’t need to safeguard these receipts for future references or audits, the expense software provides cloud storage space for maintaining your expense records. This allows you to save big processing costs up to 63%, and makes the complete expense reporting process time-efficient.

3. Automated Fraud Detection And Prevention

Fraudulent expense receipts is a common theft in the manual expense reporting process, especially, when done by senior management it cannot be detected or taken action against easily. But, that’s not the case with expense software, which has in-built features to verify every receipt against past records and aligning with company policy.

It identifies frauds like duplicate receipts, and policy-violating expense claims, and notifies the finance team and the approver to resolve the anomaly. You can customize multi-level approval workflows like tracking mileage through GPS-recording system, QR code, spending limit, etc., which adds transparency and credibility towards a fraud-free expense reporting system.

4. Visibility and Transparency

Expense reports are generated through huge amounts of data collected for a year, and then due to limited visibility across departments and teams, it gets clumsy and impossible to generate reliable analytics to identify spending patterns, etc. metrics.

The expense software automatically generates customized analytical reports on travel, policy violations, reimbursements, rejections, etc. with real-time data for intelligent and quick decision making. For example, through a single click you can enlist all the policy violators in your company, which could save a lot of money..

Also, these reports allow you to make timely decisions on targeting best vendors and crack better deals and discounts with them, and also monitor cash flows with audit compliant reports.

Conclusion

Manual expense reporting is an obsolete practice which exposes your business to high processing costs and frauds and many other flaws. For these reasons, many businesses are shifting to expense software for their expense reporting, as it resolves many issues and offers a seamless and time-efficient model. You get a transparent system, along with accurate and fraud-free reports with real-time data.