Time to update your expense management process
The failure to notice small changes can result in major problems when you’re managing employee expenses.
It’s the gradual nature of ‘creeping changes’ as a business continues to grow which makes it difficult to properly identify potential threats and system inefficiencies.
Issues which would otherwise seem obvious can remain hidden when the organizational weakness are being slowly revealed over weeks, months and years.
Employee expenses are particularly prone to this problem as systems and processes that can cope with a small workforce begin to fail as a business evolves in scale and scope.
Without noticing it, a company can find itself stifled by inefficiency and dangerously uncontrolled expense costs, leading to the risk of compliance breaches and expenses fraud - a problem which contributes to global business losses of $2.9 trillion each year.
So what are the warning signs that you need to look out for? Here are some of the most commonplace areas that you need to monitor:
Processing times become slower
An obvious sign that there are underlying issues is when the time it takes to process reimbursement costs starts to lengthen. As organizations grow and administrative requirements become more complex, finance teams find themselves struggling to cope with a rising level of paperwork.
It’s an inherent problem with traditional expense management methods which are reliant on information having to be processed by hand. The lack of scalability makes effective management an uphill struggle as companies grow.
Increased level of losses
As more time and resources are required to process reimbursements, there’s less focus placed on properly managing and policing out-of-office costs. It creates an environment in which workplace fraud can easily remain undetected.
As exaggerated and falsified claims go unchallenged and fraudulent practices become normalized, the expense costs will continue to spiral. Alongside fraud, there’s also the increased losses through rising levels of user error.
Lack of management visibility
A common problem which will slowly emerge over time is the loss of accurate and up-to-date expense information. As a workforce expands and a company structure diversifies, it becomes increasingly difficult for finance teams to access or collate data.
It’s a problem which tends to reveal itself whenever finance teams are required to provide external authorities with information on expense spending. Any inaccurate or missing data will cause compliance issues.
Expenses become toxic issue
When expense reimbursements start to become the source for staff discontent and disputes, it’s a surefire signal that there are underlying problems that need to be addressed. They’re usually symptoms of poorly communicated policies and inefficient processes.
A failure to identify and tackle these issues creates a self-perpetuating problem with reimbursements starting to become a divisive battleground for grievances between management and employees.
Outdated expense policy information
When was the last time you modified or updated your company’s expense policy? Without constant monitoring and any required tweaks, a policy will start to become out of sync with the evolving needs of the company and the changing requirements of external legislation.
An associated issue is that knowledge of policy rules within a workplace are prone to fade over time. An effective policy requires regular reminders and easy to understand and accessible information.
If any of these issues seem familiar then it could be time to review the way you’re managing employee expenses. For two-thirds of companies, this is still done with traditional methods - a combination of paperwork, spreadsheets and manual processing.
It’s a reliance on these methods that’s the root cause of all of the scalability problems that have been highlighted.
Expenses software such as webexpenses is designed with the flexibility to grow alongside a company - able to handle the evolving challenges of larger and more diverse company structures.
The use of an expenses app allows any paper receipts that employees receive to be converted into a digital form, virtually removing the need for any slow and inefficient manual processes.
By providing finance teams with access to real-time spending data, it provides access to accurate information on every aspect of reimbursement costs. With integrated reporting tools, finance professionals have the tools needed to identify and tackle issues early.
Webexpenses provides a smarter way to manage employee expenses. Learn more and request a free demo, today.