Finance

Combating Top Expense Management Challenges

When it comes to travel and expense policies, procedures, and costs, there are a lot of issues faced by many businesses. Despite the challenges and issues, many businesses don’t make correcting these problems a priority.

When the issues aren’t corrected, there are quite a few ripple effects throughout an organization.

One of the big ones is a fraud, but beyond that, there’s employee frustration because they find expense management to be time-consuming and burdensome. There’s also the issue of human error, and ultimately all of these issues can cost a lot of money for businesses of all sizes.

Most of the big issues are using expense reporting software and a modern expense reporting app. However, some businesses still don’t do this.

The following are some of the specific, most common expense management challenges faced by businesses across industries.

Lack of Policy Clarity

Travel and expense policies are often either not well-defined, outdated, and don’t speak to the current needs of a business and its employees, or they don’t really exist.

All of these scenarios are a problem.

Employees will either hold themselves back too much and shoulder too much of their own expenses when traveling for work when they’re not clear on policy directives, or they’ll go in the other direction, which is how fraud can begin.

Employers need to ensure that they’re putting policies in place that aren’t just checking a box but are customized to their company and are specific. Along with expense management software, clarity in policies is one of the best ways to prevent most issues in this area.

Employees must understand the policies apply to everyone as well. If there need to be different policies for different employees or departments, those should be created, rather than having a blanket policy that doesn’t apply to everyone.

There are often issues related to spending outside of policies, but employees may think they’re doing the right thing, such as booking with another hotel to save money. They don’t realize that since that hotel isn’t on the company’s preferred provider list, they’re ultimately violating policy, even though they have good intentions.

Missing Receipts

If you were to ask both employees and employers about one of the biggest headaches from expense management, it would be missing receipts. When employees lose or forget their receipts, it then leads to inaccurate reporting. That causes the loss of time and money in many cases.

Luckily, there is mobile expense reporting technology available that allows everyone to benefit. Employees can snap pictures of receipts while they’re on-the-go which lets them focus on what they’re traveling to do and preventing future problems.

Lack of Visibility

Employers don’t tend to have any real visibility into what’s happening in T&E spending unless they have a modern software solution in place.

This means they can’t see why certain expenses might be higher than expected, and there isn’t any clear way to see trends in spending or where strategic decisions or changes could be made.

When there’s not centralized visibility, it also makes it much harder to spot fraud, and that can actually mean that fraud grows because employees don’t think they’re going to get caught.

Visibility is important for other reasons as well. For example, employers need visibility to see where they can save money, and they need this data to negotiate with vendors. This ties into another common issue with T&E: the cost of business travel continues to rise, and many companies are spending more every year. Visibility into spending can help businesses save money and make the smartest possible decisions.

Finally, when expense management is done manually, there is a whole host of issues that can arise.

First, when people are required to review expense reports manually, it’s extremely time-consuming. This can cause issues for employees who have to wait long periods of time for reimbursements. When expenses are reviewed manually, there is also always the chance of human error.

It’s more difficult to spot problems, mistakes, or fraud when things are being manually reviewed. Without an automatic process in place, most organizations are spending time trying to find problems instead of responding to problems.

The employees who are in charge of manually reviewing invoices aren’t working strategically. Instead, they’re trying to do work that could be done much faster and more accurately through automation.

Both waste and abuse erode travel budgets, and the best thing a business can do to avoid these problems and the specific issues listed above is to use automation software and expense reporting mobile technology.

About author

I work for WideInfo and I love writing on my blog every day with huge new information to help my readers. Fashion is my hobby and eating food is my life. Social Media is my blood to connect my family and friends.
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