Advantages of using expense management analytics
The systematic analysis of data gathered to track company spending is known as expense analytics. Every business conducts a thorough analysis of all the expenses that they incur in a particular period. Data collected from all business expenditures can give crucial insights into the functioning of the organization.
Just a few years ago, when tech solutions didn’t exist, finance teams had to collect data manually, organize it, and then analyze it to be able to come up with useful information. Now businesses use expense management software to do the same work much faster. Smart fintech tools allow the collection of data in real-time and analyzing it becomes very easy due to the simple sorting and filtering functions using the software.
Expense report analytics lets the finance team and key decision-makers like the founders of a company get an overview of all business expenses. The ability to view each expense in a comprehensive document gives the stakeholders an idea regarding the forecasts that they had made versus the actuals. It lets you see whether the budget planning for the quarter or the year panned correctly or not. Based on this, necessary steps can be taken to rectify how funds are utilized.
Your company might have a lot of business expenses. And you may come across many instances where an employee might have made an expense that is not allowed according to the company policy or filed for reimbursement of such an expense. By using expense management software, you can spot these errors quite easily and rectify them as soon as possible. In this manner, you are always on top of your company expenses and keep fraudulent activities from occurring.
An expense report doesn’t just tell you how much you have spent but also gives you granular data about how the company budget is being used. You will be able to see how much money is being spent on each vendor. Seeing this information you can figure out the value your business is getting out of it and whether it is worth it or not. Another powerful feature of an expense business analytics system is being able to track every department and each employee’s spending.
With a spend management tool, the collection of expense data happens in real-time making expense management reports super accurate and pretty much devoid of any error if the software is functioning smoothly. Organizing can be done at any point with just the click of a button and any error that you may see is flagged by the system so you can get to resolving it quickly.
Expense reports can often bring to light useful insights that can be beneficial for the employees of a company. For example, if the finance team notices a certain expense that is recurring over and over again for most employees, they can talk to the HR team and decide to include the expense as an allowance as part of their payroll so that they don’t have to keep filing for reimbursements.
Ultimately, an expense report is supposed to gives the organization useful data points. These data points will help eventually make better financial decisions for the future company spending's.
As mentioned earlier, analyzing the expenses of an organization before the use of smart fintech solutions was hard. First, came the lengthy task of collecting information from each employee regarding their expenses in a particular period. Then came the sorting and organizing of this data manually in an excel sheet or some other software.
All of this took weeks to complete before the financial team could even get to analyze it. Within this process also came the risk of manual errors. Thanks to expense analytics tools, the expense reports can now be generated within seconds without any errors. The spend management tools have specific features to detect irregularities and flag them for the user to see. In this way, your finance team can get to solving it immediately so that when reports are generated, they do not have any errors.
Unlike the manual or traditional method, since all expense data is being collected in real-time, there is no chance of manipulating or avoiding any kind of expense that is occurring from the expense management software. Be it through physical or virtual corporate cards, money transfers, or expense reimbursements; each payment is tracked and is visible to all admins. Since everything is transparent when the expenses occur, so will be the case with all the spend management analytics reports.
Another important aspect to look into before you create expense analytics reports is to ensure that you have audited all your expenses to make sure that they’re compliant with your company policy. The last thing you want to be doing is sitting and analyzing a report that has expenses not allowed by your organization.
While having a complete expense report is a good thing, splitting reports based on different expense categories is also a best practice to track and measure expenses.
Related page: Features to look for in business expense tracker
Volopay is a powerful spend management software with smart financial tools that makes managing payments for your business extremely easy. Not only is it equipped with various payment modes like international & domestic money transfers, corporate cards, and employee reimbursements, but it also gives you the ability to create custom pre-expense approval workflows to have real-time visibility and control over your funds.
All of this comes together to give you deep insights into your business budget in the form of comprehensive expense reports. You can truly leverage the power of our software to view expense data in a manner that will reveal important information to help make further financial decisions.
As all expenses are being recorded in real-time, admins on the platform can view them immediately. To reconcile receipts and expenses, Volopay has also built in the OCR (optical character recognition) feature that automatically reads receipts and matches them with the relevant expenses to ensure that the claims being made by employees are legitimate.
Whether company expenses are being made through wire transfers or using the corporate cards, you’ll be able to see a separate expense tab for each category. Not only the mode of payment, but you can also see which budget the money is going from, which department is spending how much, and also the amount being utilized by every individual member on the Volopay platform.