Paper documents and Excel spreadsheets remain the most common method businesses use to manage employee expenses. While faster and more secure digital systems have emerged, many choose to remain faithful to their tried and tested old processes.
This is despite the inherent problems caused by systems that rely on huge amounts of information being manually transferred between multiple documents and spreadsheets. It’s a slow, cumbersome way of working which provides a haven for expense fraud.
It’s estimated that a business typically loses five percent of its annual revenue to workplace expense fraud, creating a global drain of £2.1 trillion each year. Along with the losses, there’s the company resources eaten up by the manual processing of claims.
So while so many businesses continue to use outdated expense management systems, what exactly are they missing out on? Here’s a look at the fundamental benefits provided by switching to a cloud-based digital management solution:
One of the main problems with traditional expense management is how painfully slow the whole process is. Information has to be manually moved through the system – bundles of paper receipts mailed between offices and details transferred by hand from forms to spreadsheets.
A cloud-based system removes this lag. A central finance team has instant access to information from the moment any expense details are submitted. With automated processes replacing manual tasks, a system such as webexpenses typically reduces processing times by around 25 percent.
Fighting Expense Fraud
A lack of effective management has made expense reimbursements a haven for workplace fraud. With so much time required to process paperwork, it has left little time for effectively enforcing policies and identifying expense fraud.
Cloud-based systems provide finance teams with the ability to take back control. Automated notifications, checks and alerts integrate policy policing into employee workflow and powerful reporting tools allow suspicious costs and ‘hotspot’ areas to be highlighted.
A cloud-based system provides significant benefits over traditional methods when it comes to ensuring third-party compliance. With details of every stage of the reimbursement process digitally tracked, recorded and stored, it allows accurate information to be easily collated for external authorities.
It’s a lack of accurate expense information that’s liable to set alarm bells ringing for tax authorities, increasing the risks of triggering an audit or investigation. It allows a business to provide proof that adequate steps are in place to ensure that all costs are legitimate.
The monthly task of having to turn a bundle of crumpled receipts into an expense claim is something that most employees dread. The inefficiency of the process also means that it can be weeks before costs, paid from their own pocket, are reimbursed.
A cloud-based system such as webexpenses allows expense information to be updated as and when costs are incurred. The use of a smartphone app enables expenses claims to be updated from wherever an employee has an online connection.
Trying to keep proper control of mileage expenses has been virtually impossible when using traditional systems. Finance teams have to rely mainly on the honesty of employees with only the most blatant exaggeration or falsification likely to be challenged.
A cloud solution tackles this problem by using a smartphone app to accurately track and record the exact route and distance of each road journey. It’s a fast and efficient system which ensures that employees are reimbursed for legitimate business journeys…and nothing else.
While businesses continue to rely on traditional methods to manage employee costs, they will continue to struggle with financial losses and administrative inefficiencies.
Webexpenses provides a smarter and safer way to manage employee expenses. Find out for yourself by requesting a free demo.