The benefits of reporting in expense management
Discover the four key advantages of effective reporting functionality
There are several reasons why it is vital to keep track of employee expense spending.
Not least of these is the fact that a poorly managed expenses policy is likely to allow fraudulent claims to creep in. We’ve written previously about the potential cost of unauthorised or inflated expense claims, which has been estimated at as much as £1.9 billion annually across the UK.
If employees know that the expense claims they make are not being properly scrutinised, then even those who are fundamentally honest may be tempted to add a few pounds or dollars here and there.
Fraudulent expense claims are only part of the problem, however.
Even if you know that every expense claim is 100% genuine, the time and effort put into manually processing and reconciling the claims, calculating what’s owed to the employee and then making the payments, is time that you and your employees could be putting into running your core business.
In addition to this, a haphazard approach to expense claims – dealing with each claim as an individual item – will mean a strategic picture of spending doesn’t emerge.
Business travel expenses amount to £39 billion per year in the UK alone, a figure which is set to rise by 3.7% per year for the next 10 years. If you run a business that pays expenses then you’re contributing to that £39 billion, it’s vital to understand how and why.
This can only be achieved by using an expense management system that allows you to generate detailed and meaningful expense reports, so that you can build a full picture of how, when and where your business is incurring expenses. A well-built expense management solution can make this process even easier but allowing you to visualize your expense data and drill down to expenses made by a single team, or person.
For many businesses, an expense policy can all too often be an ‘emergent’ policy. In other words, it can evolve on an unplanned basis, as employee expense types change, new types of expense-based activity start to happen and new expense areas emerge, such as developing new markets, products and services.
In these cases, maintaining a comprehensive record of how expense claim profiles have changed in the last 6 months will enable you to plan for expected claims in the next six months. In broad terms, this could mean simply knowing how much to budget for mileage claims, for example.
Or on a more granular level, detailed reporting of hotel bookings in the last period may put you in a stronger position to negotiate cheaper rates moving forward.
Comprehensive reporting also brings with it a host of advantages for administrators in charge of your company’s business expenses including:
Effective reporting creates a clear policy, which means your employees know exactly what can and can’t be claimed for and how much is allowed for individual items. From an administrative point of view, it will enable simple tracking of individual employee spending and instant flagging up of any overspends. The following GIF demonstrates a 'soft' policy coming into effect:
Comprehensive reporting provides visibility, ensuring that all the information you need is there at your fingertips. Working out the average spend on specific items and activities will be simpler if each separate claim isn’t buried in an individual report.
The standard method for analyzing expenses is to work from spreadsheets. While this is useful, it can be time-consuming to input the raw data you need to analyze. If you also have to trawl through boxes of paper receipts, then the time spent calculating expenses can become a major part of the working week, for you and your employees. Expense submissions made through an app are ideal as they cut out the paperwork and time spent re-keying data. Automated reporting does the work for you, leaving you free to analyse the information and allowing decisions about policy to be taken more quickly.
Comprehensive reporting isn’t just important for administrators. It also works for employees because it means that claims they make can be reimbursed more quickly. Combine this with an easier alternative to manual expense claim submission and you have a recipe for improved employee morale.
Traditional expense processes tend to work on a monthly or even weekly cycle. Comprehensive reporting creates a longer-term view, enabling you, as an administrator, to respond to trends and changes in business expenses as they emerge
Keep a close watch on our blog to learn more about comprehensive reporting features that we will be adding to Zetadocs Expenses in the near future. The GIF below showcases some of the reporting functionality: