Difficulties in Expense Management and how to overcome

Efficient travel and expense procedures worry your employees and affect the visibility of the exact destination of your money. Error-prone spreadsheets and slow refunds are frustrating when it comes to managing travel and expenses.

Globalization, business mobility, and international developments are driving up a company’s travel costs. One of the biggest challenges companies face is how to properly manage their travel and expense costs. The main goal is to reduce manual processes, save money and reduce the time spent managing travel and expenses.

If you can meet the following challenges, your company will have a good reputation:

Lack of visibility

Do your employees spend extra money during the trip to buy food or items in the room? Only when they are seen and taken into account can costs be optimized. Employees should use corporate credit cards for travel. This card ensures that all expenses are tracked and monitored and can accommodate rules such as these: Funds can only be spent if the manager approves the amount.

Delayed submission of expense reports

Timely submission of expense reports improves the quality and efficiency of the overall travel and expense reimbursement process. Ultimately, incorrect reporting can result in loss of receipts, errors, and mistakes that require special processing for approval. Creating sensitive deadlines in the expense management software with email reminders facilitates regulatory compliance.

Employee reimbursement takes months

Employees are often disrupted by reimbursement delays, and can even be so angry that they give up their jobs. Delays in approval or the obligation to sue employees for missed receipts are a major cause of delayed reimbursements. Notifications and reminders via the automated email system can simplify the approval process.

Data Entry Errors

Spreadsheets are still widespread in many organizations and require extensive manual data entry, often leading to costly errors. An automated system integrates expense management platform, identifies inconsistencies, eliminates errors between booking amount and effort, and provides quick access to data.

Excessive Travel Expenses

Managing travel expenses can be difficult, especially for large companies. The growth in spending volume requires more effort and time from the finance team, resulting in higher process costs. This creates difficulties for companies trying to control unnecessary expenses. The organization’s costs can be easily controlled by using a cost management system.

Uncertain policies

Any difficulty in understanding travel expense policies can cost the company more in the long run. An employee who has difficulty understanding whether an expense falls under the approved expense category will unexpectedly bill for unauthorized purchases. With clear and well-communicated policies, employees are trained and are unlikely to purchase outside company policies.

Unofficial reservations

Employees want trustworthy travel policies so they can provide comfort when booking flights and hotels. In such cases, a comparison can be made by comparing initial booking costs with actual expenses. In addition, the statement in the policy document that unofficial expenses will not be reimbursed can be very useful.

Too many boring processes

When employees on the move incur business expenses as part of their work, employees, managers, and the finance department want an expensive process that is easy, fast and efficient to manage. For those using manual expense reporting systems, capturing, recording and using equipment costs can be a cumbersome and time-consuming process. Keeping receipts, remembering what the expense policy covers, completing expense reports, remembering what each transaction is for, not exceeding the daily limit all these questions are a challenge for the employees.

Lost revenues

Any employee who has lost his business receipts knows how much of a headache it can be. You end up wasting time looking for them, forgetting what the costs were, and you end up misstating them. In addition, you know that your supervisor or the finance department asks you to justify the expense report. If you are a repeat offender, you may receive a disciplinary warning. The loss of expense receipts can also lead to inaccurate expense reports, possible mistrust of the employee and potentially negative effects on the company’s efficiency and morale.

The management and enforcement of expenditure policies

Unconventional or uncontrolled expense management is an eternal problem for many companies. Employees are not aware of the company’s expense report, the types of expenses authorized or not, the daily limits or whether they have exceeded the established limit. If the company has agreements with preferred suppliers or discounts with airlines or hotels, this may not be known to all employees.

Lack of transparency in reporting

Reporting and knowledge are essential to understanding how the expenditure budget is spent and accounted for. But with traditional expenditure management, such transparency is simply not possible. Without a detailed and thorough report, it is difficult to understand which cost categories account for the largest proportion of costs, which employees and departments cause costs and to what extent, and which expenditures should be retained in times of fiscal restraint. In addition, it is impossible for authorized employees, such as the finance team and supervisors with manual expense control systems, to monitor and track expenses in real-time to slow or monitor employees on the move.

Deadlines

People are too late. It is a reality of life. Especially when the processes they have to follow are cumbersome and time-consuming. Any excuse to move them. But if receipts that should have been submitted months ago suddenly appear, it is a problem that the finance department can do without, especially if it is after the end of the year, or if it has to be recalculated for a client or project. Delays in submitting expenses result in delays in reimbursing employees, so everyone gets by. Delays are a problem everywhere.

Conclusion

With outdated or impractical systems, effective travel management can be a very tricky undertaking. Travel costs can be organized by identifying problem areas and implementing the best solution for your business as well as simple management strategies.

The Solution

These challenges can be overcome by using a cloud-based cost management system that integrates with your accounting software. Such software enables the traveling employee to get a picture of a receipt and present it automatically on the road as soon as the costs are incurred. This eliminates the risk of lost receipts, delays and the need to cut paper receipts to paper expense folders.

Some Expense management systems allow administrators to centrally set expense policies and enforce rules to avoid the above issues. Some also provide detailed drill-down reports on a wide range of metrics for real-time analysis. The expense management software ultimately makes life easier for everyone involved in the process.

Looking for an automated Expense Management system, we suggest you IceHrmwhich is one of the best HRIS systems which has so many HR functions automated into one system.

IceHrm is a Human resource management system for small and medium-sized organizations. This HRM software centralizes employee data and allows only one authorized person to access it, providing a high level of security. The presence module monitors employee time based on information about insertion and perforation. It covers all the basic HRM needs of a company such as Time Management, Attendance Management, Expense management, leave management, Recruitment management and handling employee information.

Key Features of IceHrm

Expense Management

Payroll Management

Time & Attendance Management

Document Management

Employee Self Service Management

Performance Management

Performance Appraisal

Benefits Management

Attendance management

Email Integration

Project Management

Workflow Management

Dashboard

Employee Lifecycle Management

Unlike the other popular HRM software, you can use one system for all HRM functions. As the other HRM software tools are designed for specific HRM functions separately, using IceHrm will benefit you to utilize all HRM functions in one software. There are three different editions in IceHrm. Each edition has different features. You have a choice to select which edition will suit your organization according to your HR requirements in the organization. Also, you can purchase the IceHrm software based on the number of employees in your organization.