9 Features of an Ideal Expense Management Process
Whether you’re creating an expense management process for the first time, or have one in place that’s not working, you likely have an ideal expense management process in mind that would increase organizational efficiency and make everyone’s lives easier.
What is that ideal? It’s probably something that creates the minimum amount of work for employees, managers, accounting, and HR, while putting safeguards in place to both prevent runaway spending and ensure compliance with regulations.
What does that look like exactly?
1. Your ideal expense management system should be device-agnostic
The perfect expense management system (EMS) can be accessed by employees (and their managers) on the go. The ability to enter expenses immediately after a purchase makes it that much more likely that reports will be submitted on time. With a mobile-ready expense management system, your employees can enter expenses as they exit a restaurant, or in the elevator to their hotel room when they arrive home. And if they want to wait until they’re in front of their computer, they can do that too.
2. Expense entry should be seamless
Advanced expense management systems make manual entries—which can be fraught with error—a thing of the past. The ability to import data from your travel management system, take photos of receipts, and automatically choose expense categories should be at the top of your priority list for an ideal process.
3. Integration with travel booking software
The entry bar for travel management software (TMS) continues to go down as the tools become more robust, accessible and inexpensive. Because of their ability to handle travel policy, pricing rules, and lowest logical fares, even small companies should be considering the cost lowering capabilities of a TMS. Once a TMS is in place, the ability to import flight, hotel, and transportation costs into your expense management system becomes essential.
4. Your expense management system should have an easy approval process
One of the biggest hiccups for most businesses involving expenses is the approval process. Management tends to have a lot on its plate, and HR and accounting teams rarely feel empowered to interrupt business in order to get an approval for an expense report. Automated approval emails are efficient and non-intrusive, giving both managers and accounting professionals an easy system for one-click approvals.
5. Automated expense policy inspection
No one inside a company—neither management nor accounting—wants to have to play expense policy cop. An automated system that informs an employee when an expense is out of policy before they submit a report can help prevent violations that can turn into awkward conversations or runaway costs.
6. User-friendly dashboard for accounts payable
Things can get tricky for accounts payable if your expense management system doesn’t quickly tell them which expense reports are complete, management-approved, and within policy. Your ideal expense management system will highlight which reports are 100% ready, so that accounts payable can quickly approve them and send data to payroll, banking systems, and the general ledger.
7. Your ideal expense management system should have direct deposit functionality
With payroll increasingly tied to an employee’s personal banking, the ability to deposit reimbursement checks in the same way has become both expected and essential. Be sure your expense management system has the option of reimbursing employees via direct deposit.
8. Automatic data exchange with your accounting system
There’s nothing more frustrating than an expense management system that doesn’t end with easy export to your accounting system. Your ideal system should allow you to customize expense categories that match general ledger entries—and those expense categories should be obvious for the rank-and-file employees who will be filling out expense reports.
9. Advanced reporting
While the primary function of any expense management system is collecting expense data, ensuring approvals, and passing that data on to your accounting system, the fact that all that data is collected in one place allows for powerful reporting capabilities. A best-in-class EMS allows you to collect information about employee expenditures, discover where costs may be excessive, and help inform your travel and entertainment policy going forward.
What’s the end result of an ideal expense management process?
Near seamlessness. An EMS that is configured properly should take expenses from point-of-sale and flow them through safeguards and into your accounting system with minimal human interaction.
Ready to Find Out More About Expense Management Software?
ExpenseWire is a wholly-owned subsidiary of Paychex, a trusted name in the HR business that serves over half a million small and medium-sized businesses nationwide. Our expense management software captures expense data at the time of purchase, then flows that information into your reimbursement process and accounting systems.