When it comes to the employee expense approval process, many organisations are still relying on a manual system. And while it may have worked in the past, a manual expense approval process can be slow, inefficient, and rife with potentially costly errors.
An automated system may sound great but what exactly does it entail? And what would be the benefits of changing from a system you’re familiar with? In this guide, we’ll answer all questions you have about the benefits of an automated expense approval system so that you can transform the way you do staff expenses for the better.
What is Expense Approval?
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Expense approval involves the review and approval of business expenses incurred by employees. This process is important to help ensure that only legitimate expenses are reimbursed, and your business is protected from employee expense fraud. Plus, it helps to ensure that spending stays within budget.
Different expense types which employees can claim as best practice should be explained in a written corporate expense policy and usually include things like:
Accommodation and transportation
Meal expenses
Office supplies
Accommodating clients
What is an Expense Approval Process?
An expense approval process is a system put in place by organisations to ensure that all expenses are authorised and accounted for before being reimbursed.
Typically, this process involves a number of steps, such as submitting an expense report by an employee, having it approved by a supervisor, and then forwarding it to Finance for reimbursement.
Manual vs Automated Expense Processes Explained
When it comes to expense submission, there are two main options: manual and automated.
Manuel expense submission works exactly as it sounds. Everything is done by hand, from filling out expense reports to getting them approved. Typically, requests need to be done in person or via email and the requester is often in a state of limbo waiting for approval. This can be time-consuming and prone to error, as well as create a paper trail that can be difficult to manage.
On the other hand, automated expense submission streamlines the entire process by automating key steps, such as report creation and approval. Automated systems can be developed inhouse though it's very common now for companies to leverage expense management software, like ExpenseIn.
By setting up an automated process, you create a system where expenses can be submitted and approved quickly and easily, with minimal error.
5 Benefits of Automating the Expense Approval Workflow
Automating the expense approval workflow offers a number of benefits for both organisations and employees. Here are 5 of the most significant benefits:
1) Seamless delegation when out of the office
With an automated system, it's easy to delegate the responsibility for approving expenses when you're out of the office. Simply route the expense reports to the appropriate supervisor, and they can take care of the rest. This ensures that expenses are still being approved in a timely manner, even when you're not around.
Why this matters:
Perhaps the biggest bottleneck for manual expense approval is when the approver is out of the office. This can cause major delays in getting expenses approved and reimbursed. With an automated system, you can easily delegate responsibility to another supervisor, ensuring that the process continues to run smoothly.
2) Time savings
An automated system can save a lot of time compared to a manual system. There's no need to fill out paper expense reports or chase down approvals. Everything is done automatically, which means the entire process is much faster.
Why this matters:
Expense approval is certainly an important aspect of a business and that's why it's so important to have an efficient process in place that doesn't take up more time than necessary. An automated system can help you achieve this.
3) Reduced errors
When everything is done electronically, there's less chance of errors being made. With a manual system, it's easy to misplace paper expense receipts or make mistakes when inputting data. An automated system eliminates these potential problems.
Why this matters:
Errors can be costly, both in terms of time and money. By automating the expense approval process, you can help reduce the chance of errors being made, saving your organisation both time and money.
4) Flexible approval assignment
When all approvals need to go through one place, it’s very easy for bottlenecks to form which can have wide reaching effects down the line. An automated system can allow for a flexible approval workflow with set approval limits, where individual users or even whole departments can approve expenses directly related to them. Often, expense apps provide the option that managers are automatically reminded about expenses waiting for their approval and staff are updated on the status of their claims, keeping everyone in the loop.
Why this matters:
Allowing different individuals or departments to approve expenses in a flexible manner will not only make the entire process more efficient, but it will also place decision making power with those who best understand the individual expenses that need to be approved.
5) Improved compliance
An automated system can help increase compliance with expense policies. By providing you with complete clarity over the process, you can feel safe in the knowledge that you won’t be at risk of a breach. This ensures that only compliant expenses are being approved, which can save time and money in the long run.
Why this matters:
Compliance breaches are often triggered by mistakes made during the expense approval process. By automating this process and putting rules in place to automatically reject non-compliant expenses, you can help reduce the risk of compliance breaches.
How Can ExpenseIn Support You?
It should now be clear that adopting an automated expense approval system will not only save you time and errors, but will also provide greater visibility and clarity on the entire expense approval process.
ExpenseIn will let you automate your process to allow you to make faster decisions, delegate seamlessly and provide you with a completely flexible expense approval workflow that’s both simple and compliant.
