From Efficiency to Analytics: Five Things to Look for in an Expense Management Solution
As firms work to increase efficiency and improve their processes, one traditionally inefficient process which often gets overlooked is expense reporting. Almost half of all organizations in the U.S. still rely on manual, receipt-and-spreadsheet-based solutions, and of those who have deployed expense software, many still use a solution which isn’t optimized for today’s mobile-centric traveler.
What is even more surprising about this is that submitting expenses is a task that is undertaken by wide swathes of the organization. Those who tend to submit expenses the most frequently are often those who deliver the most value to the organization. The process can be time-consuming, if reliant on outdated approaches, which makes it easy to procrastinate, leading to delays in reimbursement and client billing.
In addition to the challenges for end-users, finance teams also tire of having to manually process and code hundreds or even thousands of expense reports each month. This manual re-keying introduces an unacceptable level of risk and also prevents the team from focusing on more strategic tasks.
If this sounds like your organization, maybe it’s time to start looking for a new solution. Given the variety of vendors offering expense management technology, what should companies look for in their next system? While not every organization has the same requirements, there are some common themes that every company should consider when looking at a new solution:
Ease of use: Unlike many specialized solutions such as accounting software, which are only used by a certain team, expense solutions are used across the organization. However, unlike most other enterprise-wide applications (such as Word or Excel), a significant number of employees may only use it once every few months. Therefore, ease of use is a critical factor, or it could lead to huge headaches for your employees and admin team alike. The key is it being easy for end-users to enter expenses, both in the office and on the road. Probably the easiest way – as it doesn’t even require logging on to the expense account – is to simply take a photo of the receipt uploading it directly into the system, or just forward email receipts, such as hotel booking confirmations. However, if users still have to enter all the transaction details (merchant, date, amount, etc.) to create an expense, it’s still cumbersome to use. Consider looking for a solution with sophisticated data parsing and optical character recognition (OCR) capabilities, so it can “read” receipt images and pull out transaction information such as date, vendor and amount, and drop this directly into your expense report along with the image.
Effortless mobility: As well as a significant amount of expenses being incurred on the road, many of the heaviest users of expense management software – the road warriors – spend much of their time out of the office. They need to be able to submit their expenses from anywhere, on any device, in order to be reimbursed quickly and avoid credit card charges and interest. Therefore, an expense solution needs to work just as well on a mobile phone as a laptop or desktop. The first thought may be to look for a solution with native iOS and Android apps. However, this isn’t necessarily the best approach. Native apps rarely look the same as, or offer the same functionality as, the full version. There can also often be differences between different versions, which can lead to a major headache for training and support – especially for organizations with a BYOD (bring your own device) policy. Look instead for a web-app-based solution, or even a hybrid app, which can be accessed through the app store but offers the same look, feel and functionality regardless of the device it’s being used on.
Scalability and flexibility: Anyone who has ever replaced an enterprise-wide software solution will tell you that it’s not something they want to do again soon. To avoid this, it’s critical to find a solution that works not just today, but for your organization’s future needs as you grow, enter new markets or perform acquisitions. Obviously, the need to support the currencies and languages that your end-users require is a given, but it goes beyond that. Is the solution set up so it can handle the tax jurisdictions in all of the markets where you will need to use it? Can it handle complex international programs such as German per diems? What about technical regulations such as Mexican XML? Can support be offered in the languages that your administrators require? Scalability isn’t just a globalization issue, either. As companies evolve, their processes often become more complex, and this also applies to expenses. Unless you’re planning on never growing, you need a solution that can be configured and re-configured to fit your company’s evolving requirements (without huge consulting fees each time).
Effective Data Analysis: The financial benefits that a next-generation expense solution can deliver stretch for beyond the time and productivity improvements from automating manual processes. The ability to effectively analyze employee travel transaction data can deliver huge savings, from eliminating wasteful and fraudulent spend, to negotiating favorable rates with airlines, hotel chains and other vendors. Regardless of whether an organization uses a corporate travel booking tool or travel agency, there will always be a certain number of “rogue” bookings conducted outside this channel, which won’t be captured. In addition, there are many parts of corporate travel that are purchased while on the trip, such as meals and taxis/rideshares. An expense management captures all of the transactions, enabling finance teams to get a full picture of all spend. Leveraging analytics, finance teams can easily identify pockets of non-compliant spend and address them with managers. Knowing how much spend is made in a particular category, or with a specific vendor, can also be incredibly valuable when negotiating favorable rates.
True partner relationship: When looking for any solution, it’s easy just to go to the biggest vendor, safe in the knowledge that it will have the capabilities to handle your needs. However, there is often a fine line between them being big enough for you, and you being big enough for them. You could find yourself in a situation of being simply too small to get their full attention. Instead, look for a solution that can offer capabilities that may outstrip your current requirements (so you can “grow into” them and turn them on as required), but from a company that gives you the level of service that you’re looking for from a true partner.
While this certainly isn’t an exhaustive list, and every company will have its specific needs, these four elements offer a good starting point for your expense management selection process. Your team will thank you for choosing the right provider.
At Chrome River, we strive to create value to organizations by automating and streamlining accounts payable processes, increasing productivity, enforcing compliance and delivering actionable insight that leads to smarter decision-making.To learn more about Chrome River visit chromeriver.com/