Any business or company needs to track the cost of operations. This process includes managing all sorts of business expenses. Managing expenses goes through a lot of steps that an expense management software can simplify. It will reduce these steps and improve the process for everyone in the company.
Employees need to submit their expense reports, and managers need to approve any requests for reimbursements. On top of the process, companies need to track how much funds are allotted for some activities (like business-related travels and expenses) and document each expenditure for tax purposes. Doing all these manually can risk duplicate records, errors, and delays– all of which can result in frustrations and even penalties.
Benefits of an Expense Management Software for Small Businesses
Most large companies are already using expense management software since managing the expenses for a big company is challenging. Small businesses tend to choose the manual process thinking that they can still handle things due to their smaller size. However, small businesses can also benefit from using expense management software.
Here are 10 benefits that small companies can expect from using an expense management software:
Simplified Process
An expense management software involves lots of files and documents. Reports involving operation costs and expenses can have several back and forths. It depends on several things, including the completeness of documentation and if the managers would approve them.
That said, the process can take time. Using an expense management software automates the process, which simplifies the steps for everyone.
Faster Approvals and Reimbursements
An expense management software can ensure that each expense report comes with its corresponding documentation without delay. Managers can deny or approve the submissions with a click of a button.
Reduced Number of Delays and Errors
There will be fewer delays and errors due to accounting inaccuracy. The manual process is prone to data-entry errors which an expense management software prevents by notifying users about errors, duplicate entries, and possible overpayment. Most expense management software also has automation features that send alerts in case of overdue submissions, payments, or even unusual spending behaviour to minimize risk.
Improved Operational Efficiency
Since the expense management software will take care of most of the expense and cost tracking process, employees can spend less time on error-prone and time-consuming tasks. They will be able to focus on their tasks that bring value to the company.
Easy Expense Policy Enforcement
Announcing new policies does not always go the way planned. Some members of the company might miss it on their emails or just pass it by the office bulletin board. Even the most precise managers can miss an update or two about expense policy and tax change.
You can update and customize an expense management software to accommodate new company policies on expenses– that way, everyone can see and feel these changes.
User-Friendly Dashboards
Now, why would a dashboard be a benefit? Simple, for easier viewing of metrics. Most expense management software comes with an easy-to-understand visual format such as charts, graphs, and more. Managers can see how much the company spends per category, employee, etc. These visual aids can contribute to the financial decision-making in the business.
Fraud Prevention
Just as it is easy to overlook double entries or erroneous records when there are so many reports and documentation involved. It is also easy to miss fraudulent expense reimbursements. It can leave a significant impact, especially on small businesses. An expense management software can flag the questionable entry and notify the auditors or managers so they can further investigate the matter.
Organized Reports
Manually organizing expense reports is time-consuming. An expense management software can organize your records by employee, project, and category for you in real-time.
Improved Compliance
There are local, state, and federal tax laws that companies should follow. An expense management software allows you to categorize your expenses so that you can easily identify which ones are tax-deductible or not. Including non-tax deductible in your report to the IRS might raise some concerns. It also allows you to generate accessible electronic copies of your reports and receipts which can be handy in case of an audit.
Reduced Processing Costs
The manual process of managing expenses requires hard copies of documents and receipts which adds to the company expenses. On top of that, organizing the reports is time-consuming. An expense management software can make the process faster without the paper cost. Everything can be done with a couple of clicks on your computer.
All Things Considered…
The manual expense management process has been around for a long time. Sure, it still works today, but you need to ask yourself– Is it still efficient? Is it what’s best for the company?
Switching to digital expense management is not as hard as it sounds. You just need reliable, user-friendly expense management software to help you out.
Author’s Bio
Danielle works with FyleHQ in changing expense management as we know it. She understands how overwhelming the process of tracking cost operations can be, which is why she is passionate about sharing tips, news, and information on how to simplify expense management. Danielle shares information based on her experience with Fyle– an expense management software that helps streamline and automate the pre-accounting process.