Manual expense management: Top 5 hidden costs
The expense management system as a whole and all the nuanced steps it involves can mean tricky business for your accounts department. When done manually this level of difficulty is significantly multiplied. Not only does the process become a whole lot more expensive but the costs spread out into so many channels that they often go unnoticed and stay hidden.
Human errors are a part and parcel of any system using manual processes. In manual expense management systems employees have several responsibilities and a list of steps to follow. From keeping receipts safe to entering purchase data accurately on excel sheets, at each step, there’s a high margin of error. Erroneously logged data can lead to huge losses on a company-wide level. Let’s say 20% of your traveling employees end up erroneously logging $2 expenses as 4$ expenses. This might not look like a big number for a small company but if you’ve got a sizable workforce then the cost can drastically increase.
While it is an unfortunate occurrence, expense report fraud is quite common in manual expense management systems. Even though employee trust must be maintained you must also ensure the scope for dubious activity is kept at a minimum. Sadly, manual systems have far too many loopholes and uncontrollable factors that increase the scope for fraud. Multiple reimbursements, duplicate invoices, inflated expenses, and personal expenses claimed as a business are only some examples. With manual systems, it is very difficult to track and curb expense report fraud.
Manual business spending management not only costs your company money but also hampers employee reimbursements. The employee dissatisfaction that can arise out of this can be detrimental to business operations on a much larger and long-term level. Manual systems can be tedious, employees often get frustrated, they may find it hard to access documents and handle so many physical receipts. The overall hassle, time, and effort required in manual reimbursement can put off employees and increase dissatisfaction which in turn affects operations in many intangible ways.
Manual expense management systems do not offer a great deal in terms of visibility. Information is stored on paper documents or excel sheets. The higher the amount of data you have, the harder it will be for you to locate what you want and extract information from it. Moreover, it’s even harder to gain insights into this data when you need it. If you do want insights or analytics you’ll have to go through a very tedious process of finding, compiling, and charting all that data.
Time is money. Any time spent doing mundane manual tasks is time not spent on tasks that create real value or generate revenue and we all know how time-consuming and mundane manual expense management can be. Expense claims are often forgotten, tracking and reconciliation take a lot of time, verification is a whole different thing and, ultimately, reimbursements end up taking weeks, even months.
No more paper reports, forms, receipts, etc. means no more errors and a much faster expense reporting process. Paperless systems also mean you have to allocate fewer resources to storage, you get increased visibility and an easier time with reconciliation. Go paper-free, use the power of automated expense reporting to cut out inefficiencies and minimize errors in your expense management system.
The best gift you can give your employees is a corporate card. These cards give them the freedom to spend on the job without having to worry about reimbursements, out-of-pocket expenses, or the hassle of a full-fledged exporting reporting procedure. Your best bet is an expense management software that both provides corporate cards and has a dedicated platform to manage them from.
Lastly, cut out errors at the source by eliminating manual data entry. By letting business expense management software manage mundane admin tasks, like data entry, you can maximize employee productivity by allowing them to work on more important, value-creating tasks. Automating data entry also helps streamline business expense management and close books faster.
As we've seen, manual expense management can be quite an expensive affair. Both hidden and direct costs associated with it are plentiful and are also often hard to quantify. These costs can seep into much bigger company institutions and cause harm to the overall company health. In the face of this predicament, the only and best answer is automation.
Automated expense management, like Volopay, can slash your expense management costs down by automating all those steps that are so susceptible to error and fraud. Volopay is capable of tracking, recording, and reporting all your company expenses in real-time. With the Volopay dashboard, you can maintain complete visibility over expenses and make sure overspending, fraudulent activity, and other channels of loss are cut out before they can cost you.
What’s more, is that you can issue Volopay corporate cards to employees so that they can analyze spending and not worry about delayed reimbursements ever again. Moreover, you can also use these cards to earn cashbacks and benefits.