One of the biggest speed bumps in business accounting is manual employee reimbursement. It’s lengthy, error-prone, annoying for employees, and tedious for admins. Thankfully, expense management automation can dramatically reduce the time it takes to fulfill this process.
But that’s not the only way that expense management automation can help improve the way you do business.
In this article, we discuss how your business can benefit from automation and the key features to look for in expense management automation.
Key Takeaways
- Takeaway #1: Expense management automation involves using software to digitize and automate the processes of tracking, reporting, and reimbursing business expenses.
- Takeaway #2: Expense management automation can address common repetitive (and time-consuming) tasks such as receipt capture, data entry, categorization, approval/denial, and reimbursement, just to name a few.
- Takeaway #3: Expense management automation offers many benefits, including potential improvements in efficiency, compliance, financial control, scalability, and accuracy. Expense management automation can also help your business reduce costs and prevent fraud and theft before it affects your bottom line.
What Is Expense Management Automation?
Expense management automation is the process of using software to digitize and automate all manner of tracking, reporting, and reimbursing business expenses.
This typically includes all activities from the moment the purchase is made to the end of the process when the expense is recorded in your company’s financial system.
Automated expense management replaces manual, paper-based workflows — that may have been holding your business back — with digital workflows that can make the process more efficient, accurate, and transparent.
Why Your Business Needs Expense Management Automation
Streamlined Employee Reimbursement
In a normal employee reimbursement system, employees pay for goods or services with their own money and the business repays them for those purchases.
This process often involves keeping track of numerous receipts, filling out expense reports, submitting them to the proper person or department, wading through lists of purchases, and deciding whether or not they qualify for reimbursement.
All of this can take a lot of time and effort.
But, with expense management automation, you can set the software to handle everything. Rather than having employees advance money, you can issue cards to employees with built-in controls, and completely eliminate the expense report and reimbursement process.
Increased Efficiency
Automation reduces (or eliminates) manual review, data entry, receipt filing, and paper storage for a more efficient expense management process.
With a good system in place, employees will be able to move through the repetitive tasks in a shorter amount of time and get back to focusing on their core responsibilities.
For example, KD Construction has automated its expense management process with Coast and freed up some time for its finance team to do more employee training or learn new ERP systems.
Enhanced Compliance
Automating expense management can significantly boost transaction compliance by ensuring employee purchases align with company spend policies.
Instead of relying on manual reviews, automation tools apply rules in real time. They flag or even block out-of-policy transactions based on rules embedded in the card.
With the right automation, you can enforce limits on spending categories, vendors, or purchase amounts, while also prompting employees to submit required receipts and details without delay.
With automated controls and reminders in place, finance teams spend less time chasing documentation and more time focusing on strategic oversight.
Reduced Fraud And Errors
Automated systems are often better at detecting duplicate expenses, suspicious transactions, incorrect entries, and questionable transactions.
This level of detailed monitoring can help you reduce the impact that fraud and mistakes can have on your cash flow and your bottom line.
Better Financial Control
When expense management is automated, finance teams get real-time visibility into where money is going, without waiting for monthly reports.
Instant insight makes it easier to spot unexpected charges, keep budgets on track, and make adjustments quickly if something’s off.
It’s a more proactive way to manage costs and make decisions based on what’s actually happening, not just what happened last month.
Plus, when controls are built into the system, like spend limits or category restrictions, they’re a lot easier to enforce than policies taped on the wall or mentioned at a team meeting. The rules are applied automatically, so everyone stays within guardrails without needing constant reminders.
More Accurate Records
Accurate records are essential for a wide variety of mandatory business needs, including tax preparation and government reporting.
Automation can help managers maintain and access records for important dates on your financial calendar.
Key Features Of Expense Management Automation
Transaction Notification And Approval
Some expense management platforms can be set to automatically notify you — and even ask for your approval — when a transaction is in process.
In some cases, the system can be set to decline purchases when the transaction doesn’t match certain criteria. This helps reduce the risk of error and misuse with little to no input from you.
Automated Policy Enforcement
Advanced systems can be set to automatically enforce any and all policies that you set, including rules for:
- Total spend and/or number of purchases
- Specific days and/or times
- Which categories or merchants are allowed
This allows you to focus your time and energy on more important business matters while still maintaining control over your finances.
Mobile Expense Reporting
For businesses with employees in the field, some expense management platforms come with mobile tools that allow users to capture receipts with a cell phone and submit expense data at the point of sale.
That’s incredibly powerful and beneficial for everyone involved in the expense-reporting process.
Not only does it cut down on the likelihood that receipts will be lost, but it also reduces the workload for those on both sides of the transaction process (i.e., the one making the purchase and the one(s) maintaining the accounts ledger).
Integration With Accounting Software
Integration with accounting software, like QuickBooks, ensures accurate and timely financial processing.
Integrations like this can all but eliminate the manual transfer of data from one software tool to another, reducing the number of potential errors that can clutter your accounting.
Real-Time Reporting
With the right expense management platform and integrated accounting software, you can get real-time reporting and analytics that open the door to more informed decision-making.
Real-time data of this kind can help you develop more efficient and effective strategies to keep your business on the road to success.
Automate Your Expense Management With Coast
Coast offers expense management automation that allows you to integrate all of its smart credit cards with a spend management platform, giving you the ability to track expenses, enforce spending rules, and automate reporting.
- Digitized expense policies: Replace your paper spend policies and enforce them automatically as employees spend. With Coast, you can easily control what your employees can purchase. Choose the categories and merchants where they can shop, and determine precise spend limits.
- Mobile receipt and job code capture: Employees take a photo of the receipt and enter a job code right when they make a purchase.
- Real-time reporting and notifications: Get instant visibility into transactions, monitor spend as it happens, and spot issues before they impact your budget.
- Seamless accounting integrations: Coast connects with systems like QuickBooks Online, so you can quickly review, categorize, and export transactions without manual entry.
For businesses that want tighter control and fewer end-of-month headaches, Coast streamlines expense management from swipe to reconciliation.
To learn more about how Coast can benefit fleet-based businesses, visit CoastPay.com today.
Frequently Asked Questions
What’s the difference between spend management and expense management?
You may have heard the terms “spend management” and “expense management” used interchangeably. Unfortunately, that’s incorrect. Each term has its own unique meaning.
Spend management looks at controlling the broader picture of business spending, while expense management focuses on controlling the individual line item expenses initiated by the business and its employees.
Put a different way just to illustrate the differences:
- Spend management refers to the strategic, ongoing process of identifying, understanding, and controlling spending
- Expense management refers to the process involved in paying and auditing employee expenses
Which expense management tasks can be automated?
Expense management software can automate a wide range of tasks, including:
- Data entry and extraction
- Receipt capture
- Expense categorization and reimbursement approval
- Policy compliance checks
Bill pay and tax preparation
What are the cost implications of implementing expense management automation for small businesses?
The cost implications of implementing expense management automation software are relatively negligible when compared to the potential for reduced labor costs, increased efficiency, and improved data accuracy.
The major costs will be upfront and include:
- Software (purchase or subscription)
- Integration with existing systems
Training
After the initial cost is out of the way, some software solutions — those that are subscription-based — may require monthly or annual payments for ongoing access and updates.
You may also incur some costs for maintenance and support that includes such things as major updates, troubleshooting, and virus protection.
