If you are still using a manual expense reporting system then you have subjected yourself to unwanted risk. There are 46 percent of companies still using the manual expense reporting system world-wide, if you are one of them then you’re doing something wrong. Here are five reasons why
The cost to manually processing a single expense report averages $26.63, according to the Pay stream Travel and Expense Management report. Think about how many expense reports company files each month. On average, 19 percent of expense reports include some sort of error, and each expense report with an error costs $52 to correct.
If you search on Twitter the keyword “expense reports,” you’ll find a number of angry people.
Tweets such as “Expense reports are the devil,” or, “I love business trips; I hate expense reports.” And the list goes on and on.The main reason for this is the tedious time it takes to file an expense report. On an average it takes around 20 minutes to complete one expense report. The more they travel, the more time they spend filing expense reports whereas they could use the time for more productive work.
A lot of expense reports come from business travel; however, if you are using a manual process to submit expense reports, you are unable to do it on the go. Manual reports are extremely inaccessible unless you are in the office. Therefore, business travelers are left collecting and keeping track of receipts from every purchase they make on their journey. Not only is it tiresome to keep track of receipts and wait until you’re back in the office to file reports,but it is also inconvenient to get approved to spend money in the first place. Many manual preapproval processes take longer than a streamlined, automatic process. Are employees required to email the manager? Or submit a request that admins might not see until it is too late? Sometimes employees need last-minute approval when purchases something business-related, and manual approval processes just don’t cut it.
HIGH RISK OF FRAUD
While manual processes include loopholes for employees to commit easy fraud, automated expense management systems include technologies that monitor compliance and policy, flag any trace of fraud, and set up preventative techniques. Employees can easily manipulate purchases to add extra cash to their pocket. Employees even justify this for the inconvenience it is to travel, believing the company owes them.
LACK OF VISIBILITY
When employees spend money for business purposes using a corporate or personal card, CFO's don’t see what was spent in the company until after they receive the expense report or bank statement. If the company went over budget, all they can do is hope for a better month. Companies can save a lot of money by creating budgets and pro-actively watching what employees spend in real-time, without having to wait until the end of the month to know how much they spent. Of course, this isn’t possible unless companies switch to an automated expense management process. Not only do companies lose money and go over budget due to lack of visibility, but they also have the greater possibility of losing employee relationships.