Finance

Combating Top Expense Management Challenges

Many businesses face many issues regarding travel and expense policies, procedures, and costs. Despite the challenges and issues, many companies don’t prioritize correcting these problems.

When the issues aren’t corrected, an organization has many ripple effects.

Combating Top Expense Management Challenges 1

One of the big ones is fraud, but beyond that, there’s employee frustration because they find expense management 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 most common expense management challenges businesses face 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Travel and expense policies are often either not well-defined, outdated, and don’t speak to the current needs of a business and its employees, or they don’t exist.

All of these scenarios are a problem.

Employees will either hold themselves back too much and shoulder too much of their 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 that aren’t just checking a box but are customized to their company and are specific. Along with expense management software, policy clarity 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 needs 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 of expense management, it would be missing receipts. When employees lose or forget their tickets, it leads to inaccurate reporting. That causes the loss of time and money in many cases.

Luckily, mobile expense reporting technology is available that allows everyone to benefit. Employees can snap pictures of receipts while on the go, lettings they 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 no centralized visibility, it also makes it much harder to spot fraud, which can mean that fraud grows because employees don’t think they’ll get caught.

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

Finally, when expense management is done manually, many issues can arise.

First, it’s extremely time-consuming when people are required to review expense reports manually. This can cause issues for employees who must wait long 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, most organizations spend time finding problems instead of responding to issues.

The employees 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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