Globally, it is estimated that over 60% of companies are still using manual processes to manage their employee expenses. Often these systems have been in place for years, but the reality is that they are costing companies vast amounts of money.
Here are 5 areas of manual expense management which could be adding to the cost of your expenses.
Submitting, approving & processing expenses the old fashioned way is a laborious task! Users, managers and finance team members are required to spend considerable time on each individual claim. More complex claims have been known to take hours to check for accuracy - time which could be otherwise spent on core business activities.
2. Travel & Expense Policy Rules
This goes hand in hand with the issue of time. Not many employees will know their company's expense policy inside and out, which leads to two possible outcomes; either the claimant does not follow the rules and gets away with claims which would normally be considered outside of policy, or managers must spend more time checking each claim against the policy, and potentially denying a claim for being non-compliant. In this scenario, the claimant would then need to resubmit the claim once it is compliant. Either way will incur costs to a business, which could be avoided with software which allows for inbuilt policy rules, issuing warnings on non-compliant claims, or preventing submission altogether.
3. Inaccurate Tax Claims
Manual expense claims are more susceptible to human error. For VAT registered businesses, it is essential to make sure that all of VAT which can be reclaimed, is being reclaimed. This means selecting the correct rate, and providing the all-important receipt as evidence. Automated expense management assists with this, and OCR technology helps to identify all the VAT paid.
4. Inaccurate Mileage Claims
Mileage claims are incredibly difficult to monitor using manual systems. It is also not uncommon for employees to exaggerate their mileage claims, because where is the harm in adding a few extra miles? For companies however, a few extra miles on each claim, adds up over the course of a year, and costs. Many companies who start using an automated expense solution, with postcode-to-postcode mileage claims, will notice considerable savings in this area.
A simple concept - if you know exactly where your money is being spent, you can look at setting budgets and cutting back where needed. If your company is spending too much in a certain area, perhaps your policy needs to be reviewed to reflect this? The problem with manual expense management, is that reporting is not straightforward. It takes time to collect the data, separate claims by type and then analyse the data. Good expense management software will do all of this for you, providing numerous different reports for you to analyse spending effectively.
Click here to request a free trial of MEO-Business, and see how automating expenses can cut down on these unnecessary costs.