Pros of Expense Management
As a business owner, turning a profit at the end of the day is crucial. It may mean the difference between closing shop or remaining open.
You might wear several hats at your business, working harder than ever, but there are simple daily processes that you don’t even notice slowly bleeding you dry. In the US, expense fraud is estimated to cost businesses upwards of $ 2.8 billion each year.
Expense management software offers businesses and employees an unparalleled ability to keep track, attribute, and reimburse expenses. It does this by centralizing management processes, not to mention automates any routine manual tasks.
User Experience
If you ask any employee what they thought about what parts of their job they dreaded most, a good majority of them will undoubtedly mention filing expense reports. This is attributed to all the paperwork associated with this step. Upgrading to a digital system will undoubtedly improve on staff user experience.
Save Money
The most significant advantage of using an expense management system for any business is savings. Most companies still rely on their credit card reports to see where they are losing money at the end of the month.
Being able to see where your money is being lost allows you to deal with the problem ASAP, thereby saving you money.
Freeing Time
Traditional means (manual) of keeping track of expenses are time-consuming. Travel expense management systems help both managers and accountants save time by automating routine manual processes.
This includes; tracking, attributing, as well as reimbursements. They can focus on other activities, which increases productivity in the workplace.
Additionally, lengthy delays between submission and reimbursement frustrates employees. Usage of such a system cuts down on time spent on the entire cycle- submission, approval, and restitution, thereby increasing morale.
Reduced Errors
Managing expenses traditionally is an intense activity filled with lots of paperwork and receipts. In most businesses, managers and accountants use shared spreadsheets to review, track, and monitor progress.
This could end in compliance errors, thanks to human error. Management systems are meant to fix this. Mobile expense management systems offer employees on the road flexibility in filling up their reports while enabling timely reporting of expenses.
Enforcement Of Policy
Enforcing your expense policy forms part of your business’s expense processes. A company typically has several parameters and guidelines governing clients and projects. Incorporating an online expense management system offers businesses control over expenditure by automating reinforcement of company policy.
Such expense management tools make it easy for management to spot any irregularities and flag down employees found abusing the rules once they make a submission. Additionally, any reports requiring urgent attention are quickly flagged and worked on fast.
Data-Driven Decision Making
Having actionable data on your hands is just as valuable as clients. Expense management systems make the collection of reliable data regarding your expenditure trends, which helps in planning.
From a management perspective, exact, detailed data places you steps ahead of your competitors. Knowing how much, when, and where most of your purchases are made also makes it easier for you to get stock at better discounts.
Whether you simply need to review expense expenditures against the budget or quickly draw a company’s forecast, the detailed analytics offered by the system will simplify the task.
Flexibility And Mobility
Keeping track of expenses and relaying this information back to HQ while you are on the road can be tricky at best. Online corporate management systems free your employees to do what they do best while making regular reports.
No more are your employees bound to the same geographical location. They can freely move across the country, searching for business, and still comply with the company’s travel and expense management policy.
Compliance With The Law
Whether you like it or not, most government enforcement agencies- federal and local, are moving on to digital platforms. Integrating a modern means of keeping track of your expenses makes it easy to comply with the taxman. It also makes claiming any tax returns a walk in the park.
If you are a business seeking to implement an expense management system, please ensure that your system of choice has the following features:
- Mileage Tracking
Any on-the-road salesman or doctor is going to appreciate this feature. If your job requires you to drive as part of your job, you could qualify for a deduction on your federal tax at the end of the year.
By capturing your total mileage, you can write off on your income tax return. Make your miles work for you. Always remember to keep track of your miles. In 2019 you made the calculation as 58 cents per mile. The amount has gone down to 57.5 cents per mile for the 2020 tax year.
- Accounting/Payroll Integration
Once everything has been accurately captured, you require this information to make it to accounting to efficiently update their books. This may seem irrelevant, but, in the end, it all becomes apparent when you sit down to look at the books.
To ensure a seamless transition, please ensure that whichever system you choose integrates with your current accounting system.
Receipt Capture
This is definitely important for auditing purposes. Digitizing your receipts will smoothen the auditing process and saves on paper usage at the office. When the IRS coming knocking on your door and asks for receipts going back several years, you can be confident knowing that the digital forms are all available.
Despite being wise, keeping paper receipts in your premise indicates a lower business caliber- considering the digital age we live in.
It’s any business owners’ dream to expand into new territories. But as the business moves into new territory and additional employees are hired, expenses increase as well. Outdated means of keeping track of costs are unreliable and ineffective in the modern-day.
Modern expense management systems we have covered offer plenty of advantages other than curbing unnecessary expenditure. As you scale upwards, the system does so too, in a fast and reliable way- freeing you to focus on conquering unchartered grounds.