Why Automated Expenses Work Better for Employees
July 21, 2021
Estimated Reading Time: 5 minutes
If you work in accounts payable (AP), you already know that expenses can be a tough task. Sifting through stacks of paper receipts to verify each report takes up valuable time each month, especially when one in five expense reports contain errors. Internal fraud is also an issue and costs US businesses $2.8 billion per year.
To make matters more complicated, expenses were badly affected by the COVID-19 pandemic. One report suggested that expense violations rocketed by 292% in 2020. What was the reason for this?
The simple answer is that more staff were working from home. This meant that some started putting items such as office equipment and even meals on expenses, even when these items were not supposed to be bought with company funds. There was a lack of clarity over some items, and all too often it was left to AP teams to try and resolve the confusion. In some cases, this led to tensions, as employees did not get the answers they needed as quickly as they wanted them.
At the same time, AP teams faced pressure to help their organisations identify cost savings across the board, and working remotely presented its own challenges for businesses dependent on manual processes.
Despite these challenges, if you get expenses right, not only will it be easier for your team, but your employees will thank you as well. Let’s take a look at some of the difficulties finance teams have faced recently, and how automation can help to make the process run smoothly, keeping employees and AP teams alike happy.
The true cost of expenses
In a survey of finance professionals this year, only 19% said that their expenses process had been going smoothly. A move toward working from home for the vast majority of office jobs during the pandemic had a disruptive effect on almost all working processes. The same survey found that 40% of these teams relied on spreadsheets for managing expenses. Spreadsheets are prone to errors, and in turn employees have to spend time looking for and correcting these mistakes. What’s more, it is a challenge to chase approvals when everyone is out of the office.
Another issue is that companies had to suddenly update their expenses policies to accommodate employees working from home. People required office equipment that they did not always have at home in order to do their jobs. As a result, they purchased items such as computer monitors, printers, desks and chairs. Spending in this category was seven times higher in 2020 than during the same period in 2019, one report found – but many of these objects were classified as ‘miscellaneous’, and it was up to finance departments to update their expense policies if some were to be allowed at all.
In one survey, the time it takes to process an expense claim from beginning to end was found to be eight days. That could be reduced by almost 70% with automation.
In fact, 92 per cent of employees whose employers updated their expense policy due to COVID-19 said their organisation’s policy was clear, compared to only 61 per cent of employees whose employers did not update their policy. This did not only make the process easier, it also meant that employees were more likely to perceive their employer as being fair as the expense policy was clear and up-to-date.
Now that many lockdowns are coming to an end, offices are moving to hybrid ways of working in many cases. Work-related travel and entertainment is back on the agenda, meaning that the time early in the pandemic when fewer expenses claims were filed is coming to an end. Businesses need to be ready to process expenses in a way that enables them to adjust to this new, agile working model.
The important thing from an employee’s perspective is that making expenses claims is quick and easy. Nobody wants to wait until they are next in the office to physically hand over receipts, and then wait six weeks as accounts teams wait for the right person to approve them to show up.
How automation can help
The pandemic has put a lot of organisations under pressure, and not just in the AP department. At a time when cost savings are essential, all teams must be able to forecast accurately in order to plan for the months ahead. When one part of your spend is unclear, this is not possible.
The best solution is software that will allow all employees to upload receipts and create expense reports from anywhere, using any device. This has become even more critical now that team members are no longer in the same location. Last year, 87% of finance teams used software to manage their expenses for this reason. The global outbreak of COVID-19 simply accelerated a trend that was happening already. Imagine how much simpler it is to snap a picture of your receipt on your phone and upload it in seconds, even if you are nowhere near your computer.
Doing it online also saves time spent filing or looking through previous records, all of which employees will welcome. Most will be glad to have more time to spend doing their jobs rather than getting bogged down in tedious admin tasks.
Crucially, when managers have online and mobile access to approvals, this speeds up the process. Employees get their money back more quickly with automation, which is a weight off their minds. It also means that each department can see how much their team is spending and spot patterns, giving them enhanced insights and a more effective ability to plan.
The greater speed, flexibility and efficiency of automated expense management is likely to be appreciated by employees. In one survey, the time it takes to process an expense claim from beginning to end was found to be eight days. That could be reduced by almost 70% with automation. That makes a huge difference to employees, many of whom have been working longer hours than usual during the pandemic. They will appreciate the reduced turnaround time for reimbursements in return for their efforts keeping the business thriving in often difficult circumstances.
Pay it forward
As we emerge from the pandemic, many businesses are still focused on cutting costs where they can. In one Gartner survey, 25% of finance professionals said they would look to save money by reducing staff costs. At the same time, 24% of finance professionals said they anticipate spending money on automation in the next year.
In this tough environment, anything AP teams can do to make life easier for employees will surely be appreciated. Automation is a far less drastic way of saving time and money than letting employees go, and boosts morale and satisfaction among your people in the process.
Discover how Beanworks can transform your expense management today
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