How Expense Management Technology Is Transforming the Finance Industry

By Brad Anderson Brad Anderson has been verified by Muck Rack's editorial team
Published on June 13, 2023

Employee expenses and expense management are key aspects of financial operations that go beyond simply tracking reimbursement claims and employee-submitted receipts.

Businesses are increasingly finding benefits in finance automation solutions with robust expense management capabilities.

Today’s finance teams require accurate and up-to-date records of their employees’ expenses to ensure effective financial planning and compliance.

At the same time, the C-suite relies on accurate expense reporting to assess risk and identify cost-saving opportunities. Plus, working with up-to-date and hygienic employee expense data is beneficial for accurately gauging an organization’s financial health.

Companies should implement various policies and processes to effectively manage expenses, avoid overspending, and ensure financial stability. These include establishing clear and comprehensive employee expense policies to ensure adherence to organizational values and standards. Requiring employees to submit receipts for all work-related purchases ensures accurate recording of employee-initiated expenses and provides a clear audit trail for financial planning and compliance purposes. Additionally, making timely payments to reimburse employees for approved expenses helps maintain employee satisfaction and trust.

Leveraging the right technology solution makes employee expense management streamlined and hassle-free.

As part of a more comprehensive finance automation solution, companies can significantly reduce the finance team’s workload and minimize the risk of errors while ensuring compliance with regulatory requirements.

Robust reporting capabilities provide organizations with valuable insights into employee expenses, allowing them to analyze spending across various departments, subsidiaries, and budgets. By implementing these practices, organizations can effectively manage and analyze employee-initiated expenses and reduce the threat of financial risks.

Expense Management and Finance Automation

Finance automation is a game-changer for effectively managing expenses in today’s fast-paced business environment.

Expense management workflows are becoming increasingly complex, and organizations can significantly increase productivity and efficiencies by implementing finance automation solutions. Leveraging automation to streamline the process and minimize human errors ensures finance departments work with accurate data while eliminating time-consuming manual processes. Here are some other benefits:

Reducing Paper and Errors

Expense management software has many benefits, such as removing the need for paper receipt management and tracking. With the help of a mobile app, employees can scan and submit receipts and file expense claims on the go. At the same time, finance teams and accounting professionals no longer need to spend countless hours on inefficient and error-prone processes, such as manual data entry and chasing down receipts, that result in murky and outdated views of employee spending.

Additionally, automated expense claims and expense report filing help reduce data errors that can lead to a mismatch of payments, ensuring the business doesn’t overpay or underpay employees.

Strengthening Corporate Policies

Finance automation with expense management and reimbursement capabilities helps employees adhere to company spending policies. By using automated expense management workflows, spending policies and restrictions can be preset to ensure employees actively follow the policies set by the company.

Gaining Better Insights

Finance automation solutions with expense management capabilities can foster data-driven decision-making to better understand the impact that financial decisions can have on the overall business. Automation also helps with regulatory tax compliance, ensuring accounting standards, and keeping accurate records so companies can submit write-offs come tax season and pull up-to-date tax records in case of audits.

Expense Management Checklist

There are five essential features to look for when evaluating a finance automation solution with employee expense management capabilities:

1. Global Reimbursements

The software solution should empower the company to efficiently reimburse employees from any location, utilizing a robust and secure payments infrastructure. To accommodate international travel, the system should also be capable of processing foreign transactions, currencies, and payment methods.

2. One System for All Spend

An optimal finance automation solution can streamline all purchases and payments by centralizing accounts payable, global payments, procurement, virtual credit cards, and employee expenses in one accessible system. This unified system should allow for automated and streamlined workflows, secure data storage, and seamless integration with an ERP and other accounting systems.

3. User-Friendly and Accessible

The solution must be intuitive and accessible, allowing employees to submit their expenses effortlessly. The solution should encourage employees to promptly upload all necessary documentation and information while minimizing potential obstacles, ultimately promoting efficiency and accuracy.

A mobile app and dedicated web portal make reimbursements easy and accessible to employees, allowing them to conveniently file expenses no matter where they are or what device they are using. Both interfaces should be intuitive and straightforward, streamlining the expense filing process and promoting efficiency.

4. Minimize Fraud and Ensure Compliance

An optimal platform should feature automated expense policies and integrated compliance checks, ensuring that expenses are submitted and reimbursed in adherence with company policies and spending limits. Additionally, the platform can be configured to automatically apply predetermined rules, alleviating the burden on your finance team. By enforcing these processes, finance automation helps promote operational efficiency while minimizing errors and discrepancies.

5. Automatic Reconciliation

The days of manual collection and prolonged processing times are in the past. Thanks to finance automation, expense transactions and reimbursements can be automatically captured and processed while seamlessly integrating with your ERP or accounting software, similar to other payment methods.

The Future of Expense Management

Modern businesses are distributed globally, making it increasingly difficult for companies to effectively manage employee expenses. However, employee expense management software removes the barriers and reduces the errors caused by manual work. Today, effective expense management can make or break a business, and companies should consider automating employee expenses to ensure continued success.

The article was originally published on ReadWrite.

By Brad Anderson Brad Anderson has been verified by Muck Rack's editorial team

Brad Anderson is a syndicate partner and columnist at Grit Daily. He serves as Editor-In-Chief at ReadWrite, where he oversees contributed content. He previously worked as an editor at PayPal and Crunchbase.

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