Time is money, as the saying goes – and if you’re using a manual expense management system, you’re probably losing both.
According to expense management specialist webexpenses, two-thirds of companies globally still use a manual process to manage employee expenses – and it’s costing them big time.
Here are five areas where manual systems let you down.
1. They’re time-consuming.
Processing manual expense claims is an arduous task for everyone involved, from claimants all the way through to account users and finance teams. An independent study conducted by the Aberdeen Group suggests it takes three hours, on average, to process a claim from start to finish.
There is an alternate option, says Ashley Whiteman, Asia Pacific general manager of webexpenses.
“Bringing in an automated system reduces the average processing time to just 20 minutes,” he explains. “That’s a saving of two hours and 40 minutes for just one claim.”
2. They make it difficult to track and reclaim GST.
Manual systems rely on employee accuracy – no small task when it comes to assigning GST rates to specific expense categories.
With automated expense management software, you can pre-define GST rules for different categories, so the system automatically calculates the correct tax rate for each spend item.
“It also ensures the receipt is attached to that line item,” says Whiteman. “In the event of an audit, you've got the relevant invoices and you're not breaching the Australian Taxation Office [ATO] guidelines.”
3. They allow inaccurate mileage claims.
Rounded-up mileage can easily go unnoticed when companies rely on a manual expense system; in fact, the 2017 Global Report on Employee Expense Fraud found that 42 per cent of Australian respondents have submitted fraudulent mileage figures. In such cases, organisations are losing money by repaying employees more than they need to – plus, they face an audit risk that could result in a fine.
To combat the issue, webexpenses requires users to enter the postcode start and end points of their journey, so the exact mileage can be calculated.
“We’ve found that the average dollar value of a claim is reduced by approximately $30 when you bring in an automated system,” says Whiteman.
4. They don’t enforce company policy.
It’s next to impossible to spot duplicate or out-of-policy claims when plugging expenses into a spreadsheet. With a digital system, Whiteman explains that your company policy is built in.
“You can lock down overspending by blocking amounts,” he says. “Alternatively, you can set up notifications and flags throughout the process, so it’s easy to identify a breach.”
5. They leave you vulnerable to fraud.
Finance teams using a manual system don’t have time to cross-examine every claim; unsurprisingly, the 2017 Global Report on Employee Expense Fraud found that 86 per cent of office workers had never had expense reports challenged or declined.
“When you don't have a system that keeps people accountable, it’s quite easy to add on extra dollars here and there,” says Whiteman.
“Entertainment is a classic: you might have a partner go with you, which you incorporate into a claim. But you can set limits on any category, such as $200 a night for hotels. That reduces your bottom line in terms of how much you're allowing to be put through by the claimant.”
To find out how webexpenses can help you address these five expense management challenges, or to request a demo, visit webexpenses.