6 reasons why reporting is important for expense management
Time to get on top of your employee expense spend
Data analytics has become a fundamental process in the business world, especially over the last two years. Research has shown that internet usage in the UK doubled in 2020 due to the pandemic, resulting in even more data produced than ever before.
Most people who run a business will know that even the most cursory interaction with customers generates data which, if used in the right way, can help to streamline and focus the way the business operates.
Data analytics are likely to become increasingly important in the next few years, if these stats are anything to go by:
Surprisingly, research shows that most businesses do not use the data they collect to the full potential. This leaves a huge amount of highly valuable data being ignored and wasted.
The businesses which use the opportunities offered by effective data collection and analysis are likely to be the ones who leave the competition trailing in the next few years.
Time to act now
Employee expense management is one area of business that provides data that shouldn’t be neglected.
Automated expense management systems, such as those offered by Zetadocs Expenses, have a vital role to play in bringing businesses up to speed in terms of realizing and exploiting the power of data analytics.
As well as making it easier to capture the details needed for quick, efficient and fully compliant expense management, Zetadocs Expenses makes it possible to utilize the data gathered to create reports which offer strategic insights into the way your expense management – and the wider business – is actually functioning.
While accurately capturing details such as mileage travelled may be the impulse which drives most businesses to invest in automated expense management, the reporting aspect is actually just as important, and these are a few of the reasons why:
The traditional means of making, approving and collating expense claims tend to result in a mountain of paperwork scattered across a number of locations. And as the last two years has demonstrated, these locations can change quickly.
While an automated system brings everything together in one place, there’s still a degree of effort involved in, for example, tracking all the expense claims of a single employee over a specific period.
The same applies to monitoring the spend of specific departments within a business, or the expenses generated by a specific activity such as travel. Tailored reports, on the other hand, can be created using parameters which are set to bring the information in question together in one unique report at any given time, making it easy to find the precise details you’re looking for.
Pre-pandemic, the average spend on business travel in the UK (just one type of expense) has been estimated to be at £750 per employee, per year. This may seem like a fairly small cost at face value, but when multiplied by the number of employees, it becomes huge.
In addition, the average figure will include those businesses – for example, manufacturing at a single base – who don’t spend a great deal on travel, whereas for those businesses who rely on regularly getting out and meeting clients nationally and internationally, the figure is likely to be much higher.
Even with the drastic reduction in business travel due to the pandemic (pre-pandemic this was as high as £30 billion), the business travel industry still has a huge impact on GDP. When expenses are being claimed instantly in real time while business trips are being made, it can be all too easy for the money being spent to build up fairly quickly without being analyzed.
Comprehensive reporting, on the other hand, will create a full picture of the costs involved, broken down by specific categories such as type of expense, when the expense was incurred and whether the amount being spent is going up or down.
The fact that information of this kind can be analysed by a wide range of employees – depending on access set by the business – means that insights from across the board can be applied to the costs, and damaging trends can be spotted before they become properly entrenched.
Every business should have a comprehensive expense policy in place, setting out exactly what employees can claim for and how those claims will be evaluated. Making sure that the policy is clear and easily understood as well as highly accessible will maximize the chances of all employees knowing exactly where they stand in terms of expenses.
Expense policies must be flexible enough to change as and when the state of the individual business or the wider economic landscape dictates, however, for example, when working remotely.
Reports can identify patterns which emerge, such as which expense policies are being violated most often - making it possible to investigate why this is the case.
In some cases, it may simply be a question of employees not fully understanding how a policy is meant to operate. But in others, consistent violation may highlight the fact that a particular policy has become out-dated and is no longer fit for purpose.
When involved in the day to day running of a business, it can be difficult to find the time to take a step back and gain a strategic, long term view.
Detailed reporting on expenses, though, will provide the kind of overview that is often extremely difficult to access from within the workings of the system itself, revealing longer term trends to enable proper strategic planning for the future.
Reporting can be set over a specific time-frame – such as a week, month or several months – to enable a truly comprehensive picture to emerge.
One of the main benefits of reporting, is that it will make it easier to allocate budgets in a forward thinking and carefully planned manner.
Rather than simply responding to events as or even after they happen, long term reporting on expense claims will enable your business to identify trends and plan for shifting demands in advance, and make changes to policies and budgets before being forced to do so by circumstance.
Travel expenses usually consist of fees paid to the likes of airlines, train companies, hotels and car hire companies. The reports will detail the sheer scale of spending with each individual vendor using a range of data points, putting you in a very powerful position when it comes to accessing preferential corporate rates.
Time to automate
Automated expense claims make every aspect of business expense management simpler and more efficient, and the detailed reports which are created add another crucial layer of value.
When you use Zetadocs Expenses you’ll be equipped with everything you need in order to make decisions, and make an impact where it matters most – on your bottom line.
The GIF below showcases some of the reporting functionality:
To learn more about how Zetadocs Expenses can help you with your expense management, visit our Zetadocs Expenses product page or to see this and more in further detail, book in a demo today!