Top 4 T&E expense management challenges
The most common obstacles faced by companies using manual expense management systems
When employees travel on business trips, the costs of airfare, accommodation, ground transportation and meals add up rapidly. Even those who work from home or on-site may have to pay for expenses like office supplies and distance travelled from customer visits.
These expenses must be submitted, approved and reimbursed in a timely and cost-effective manner. However, according to Tallie's 2019 Travel and Expense Management Trends Report, 46% of companies don't even track how much they spend to process expense reports.
This lack of transparency is just one of the challenges companies face when manually managing travel and entertainment (T&E) expenses. This blog post analyses the top 4 challenges and how you can overcome them.
1. Poor data visibility
Effective financial management is impossible when a company does not know how its money is spent by employees in the field. This lack of visibility leaves finance teams with errors, duplicate reports, missed receipts and even the potential for employee expense fraud.
Some companies may have traditionally managed travel habits well, but COVID-19 turned everything upside down. Dataconomy reports that the pandemic has eliminated T&E's lowest-spending categories, such as phone bills, and pushed prices up in hotels and travel fees. Having visibility of spend helps companies to budget more effectively and negotiate discounts with suppliers.
2. Inefficient processes
With lots of paperwork, emails and spreadsheets involved, the manual expense management process is time-consuming and error-prone. It also leads to significant inefficiencies and bottlenecks.
According to Tallie's research, 43% of organizations use manual processes to manage expense reports. 46% do not track work-related costs, making the move to an automated expense management system one which will allow all staff to track expenses with ease. The move will benefit many businesses. It's no exaggeration that working from home can add congestion to already tedious processes, especially in organizations that require T&E authorization and approvals. An automated solution will reduce such congestion.
3. Old system/technology
A bright spot for companies with new technology is that they can outperform their competitors and take advantage of certain cost management industry trends, such as improved mobility, integration and extensive use of AI, automation and machine learning.
Over time, out-dated systems tend to overwhelm both the finance team and the staff. For example, according to Tallie, only 27% of organizations have systems in place that automatically flag out-of-pocket spending. This could mean that the accounting department is manually reviewing the reports or that unauthorized entries are creeping in.
4. No policy enforcement
One of the best ways to manage T&E expense costs is to create a policy that everyone in the organization must follow. Your policy should outline exactly what is and is not an acceptable expense, based on up-to-date regulations as well as your budgeting culture and practice.
A formal policy outlining what is and is not allowed also helps the accounting department and/or approvers decide quickly and fairly whether an expense qualifies to be reimbursed. Employees know when they can expect to be reimbursed and what recourse they have if an expense is not authorized.
How can Zetadocs Expenses help you?
Whether you are looking for a solution to save time, reduce human error or reduce expense fraud, an automated expense management solution gives your business a competitive edge over with companies that do not use one.
Zetadocs Expenses is an expense management service designed for Microsoft Dynamics 365 Business Central and NAV. It provides centralized control over expense approvals, credit card reconciliations and business mileage. Some of its features include:
Fast and Accurate Reimbursements
Once approved and verified, expense reports are automatically exported to Business Central, saving time currently spent on data entry and improving visibility of employee reimbursements.
Better business credit card management
Export relevant and logical business credit card transactions to save time re-entering each statement line individually in Business Central.
Create new expenses by uploading receipts, analyzed with OCR to extract information, then automatically entered into new expenses.
If you want to learn more about the benefits of Zetadocs Expenses, sign up for your personalized free demo now or visit our Zetadocs Expenses page for more information.