We all want to get our expenses paid as quickly as possible. Now, thanks to automated expense management systems and software, we can. Automation and technology has moved expense management from the snail age to the space age.

1. What is expense management?

Expense management is the system that helps to process, pay, and audit employee-initiated expenses. These expenses might be for travel and entertainment related to the business. It includes the policies and procedures which govern such spending, as well as the technologies and services utilized to deal with the information associated with these incurred expenses. The automation can occur when an employee submits a claim or when the finance or admin staff process them. The best systems offer automation of some sort at both levels.

2. Expense management software

There are many different types of expense management software on the market but all assist organizations to initially manage employee claims, authorize them, pay them and provide an audit trail to review later. Expense management software is available from companies that produce and license this software and then implement and support it with the business. Or it can be obtained as a service from a software as a service provider who provides web-based applications that are managed by a third party.

3. Old versus new

In the old days an employee would complete a paper expense form of some sort that they would forward, along with any appropriate receipts to their manager or other supervisor for approval. The manager would review the claim to see that it was within the company guidelines and then send it to the finance or accounting section for processing and payment. The finance staff would enter this information manually into the company’s finance system before filing the claim and receipts away.

In the new way of doing things, almost all of all of these transactions are automated. The employee submits their claim electronically and all the approvals along the way are automated as well. Even receipts are scanned so that it is not necessary to retain them. And payments can be made by direct deposit to an employee’s bank account so that no expense payment cheque or printed receipt is required. In this way expense management automation reduces its individual transaction costs and improves management control in the process of logging, calculating and processing corporate expenses. The cost of processing an expense claim is reduced as the level of automation increases.

4. Benefits of an expense management system

There are three main reasons why an organization may choose to automate their expense management processes. They are compliance and the need reduce the current risk levels posed by non-compliance with internal policies and external tax/government regulations. They are cost reduction by reducing processing and auditing costs associated with expense reports through expense management automation. And to improve employee productivity and satisfaction by making the expense payment system easier to use and faster to make payments.

5. Benefits of an automated system

An automated expense management system will improve and organization’s ability to code, approve and report on expenses. It can provide a direct integration with the overall accounting system and provide for ease of employee use. This could include a mobile app for expenses that allows employees in travel status to submit their costs remotely. The software expense management can also be configured to evaluate expenses against company expense policies and be adjusted based on project, department or the overall budget. Finally, an automated expense management system can help detect fraud and prevent duplicate billing and expenses which aids in both compliance and the audit process later.