When people think about manual travel expense processing, the first thing that comes to mind is the weary road warrior, spending hours on arts and crafts projects, stapling or taping receipts to printed spreadsheets. It can be a painful, inefficient task. The last thing a business traveler wants to do at the end of the month is try and remember where all their receipts, are and then spend hours filling out a spreadsheet.

While this is certainly what most people think of when talking about the efficiency challenges presented by manual expense reporting, the reality is that it’s the approval and reimbursement process that is far more impacted. The most obvious element of this is that manual processes take far longer than those which are automated. From getting approval on expense reports to keying data into an accounting system, each step drags out the amount of time it will take to reimburse staff, pay corporate card bills, and bill clients.

Related: The Pitfalls of Manual Expense Reporting

The perils of inter-office mail

The first step to get an expense report reimbursed is getting it approved. For small, single-office, companies, or those with straightforward approval processes, this may not present too much of a challenge. Put the spreadsheet/receipts in the finance person’s inbox on their desk, they drop it off with your manager to sign it off, and the manager then writes “OK” on the header sheet and puts it back in finance’s inbox, ready for reimbursement.

However, add in any variable, and it can soon become a considerable challenge. If the approver is in a different office, the paperwork needs to be scanned, faxed or even mailed (the horror) to the approver, and then back to finance once approved. And what if it’s over that approver’s limit so needs to go up a level, or if there are multiple GL codes, requiring it to be approved by someone else (common for professional services companies)? The potential for huge approval delays increases significantly with each stage in the process. To top this all off, keeping track of where a specific expense report stands in the approval process can lead to an extremely frustrating game of telephone.

Compare this to:

Expense automation solutions streamline the approval process by putting the entire process online and automating workflows. Each member of the approval chain is automatically notified (and reminded) when they have an expense report to approve, and can do so either in the app, or even within the email notification. In addition, business rules within the system will route a report for approval based on factors such as client/GL code and amount, ensuring that approval policies are automatically applied.

RelatedHow I Did It: How UPenn Health Ditched Interoffice Mail and Couriers for Automated Approval Routing

The complexities of policies and approvals

Most people who travel for business or approve their employees’ expenses know how much can be submitted for a travel meal. But what if that meal is in Sao Paulo or Strasbourg instead of Seattle? With different reimbursement rates for each location, or perhaps translating a meal cost from reals or euros into dollars? That will likely not be something the approver knows of the top of their head. If a plane ticket looks abnormally expensive, why was that? Was it booked less than 14 days in advance, and if so, why was this? Were there cheaper fares available on other carriers?

Each time an approver needs to refer back to the company T&E policy or dig through receipts to get to the bottom of a query adds further delays to the process. Maybe only 10 minutes or so per report, but if an approver has multiple reports to approve, it can quickly become a major time suck.

And what if an employee has a $2,000 business trip report that needs approval, and everything looks fine apart from a single line item? Maybe it’s just one evening meal that’s $50 over the policy’s limit. Does the approver just wave it all through in order to get the employee reimbursed in time, or do they hold up the entire process by going back and forth with the employee over email to get an explanation of why the expense was over the threshold? One risks policy enforcement issues, and the other increases the potential for delays in reimbursement, which can impact employee satisfaction.

Compare this to:

An organization’s expense policy is automatically configured into the expense management solution during the implementation process, and even the most complex international policies can be accommodated (and adjusted as the organization evolves over time). This enables companies to set notifications for travelers before submission, if an expense is out-of-policy. In addition, line item approval allows approvers to submit expenses for reimbursement at the individual expense level, so that the whole process doesn’t need to be unnecessarily delayed for a single disputed transaction.

Related: The Importance of Business Rules for Effective Expense Management

The trauma of tick-and-tie

Many companies provide frequent travelers with corporate credit cards. While these can be a major boon for employee cash-flow, they can prove a major headache for finance teams. Although employees have their receipts from the hotel, restaurant or store and attach these to their report, the card transaction data comes directly from the processor to the finance team. They then need to manually verify that each transaction has a corresponding receipt in order to process the card payment. This manual tick-and-tie process can be extremely time-consuming, and can also lead to a significant amount of back-and-forth with the cardholder, in the event of missing receipts or transaction queries.

Compare this to:

Linking a corporate card with an individual’s expense wallet is a one-time task. After that, a solution can automatically match card transactions with the receipts submitted, eliminating the manual matching process. This processed can be enhanced further with the ability to import a whole statement into the system, so the finance team can immediately see all transactions, and have them automatically cross-referenced with the employee’s purchase records.

Related: 5 Benefits of Corporate Card Programs

The frustration of fat-fingered data entry

Manual data entry is a laborious, thankless task. It’s also fraught with the potential for errors to be introduced into the process. From the weary traveler who inadvertently types the wrong amount on their spreadsheet to the finance team member who mistakenly enters the wrong billing code into the accounting system, the potential for mistakes is endless. Not only can this lead to over-/under-reimbursement, but can also cause clients to be billed incorrectly, or budgets to become out of whack with actual spend. This can cause accounting and client relations challenges, and can also be very difficult to track down and rectify, without any type of audit trail.

Related: Putting Expense Solutions OCR Capabilities under the Microscope

Compare this to:

Automated expense reporting can almost entirely eliminate the need from manual data keying. Capturing a receipt image on a mobile phone and then extracting the information with optical character recognition takes away the requirement for travelers to manually enter transaction data into the expense solution. This information can then flow directly into accounting, ERP, billing and payment systems without the need for any re-keying of data.

Related: How an Unfriendly Expense Submission Process Can Negatively Impact Your Quarter-Close

These delays and inefficiencies cost companies many thousands of dollars in employee time, which could otherwise be spent on more high-value tasks. They can also have a knock-on effect on both employee happiness and the ability for finance directors to perform quarter- and year-closing. Regardless of the countless higher ROI benefits that an expense automation solution brings, simply eradicating all of these inefficiencies can themselves offset the investment in the technology. 

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Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care. Sally Abella, Director of Corporate Travel Harman International
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic. Ben Zastrow Zelle
Pitfalls of Manual Expense Reporting

Pitfalls of Manual Expense Reporting

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