If you’re responsible for, or work in a finance department then you’re probably interested in how your business spend is managed? You’re probably also interested in how you can contribute to increase employee productivity across your organization?
Employees hold expenses on a regular basis, when they do their job. With the right app for managing expenses, loads of time can be freed up. Simultaneously, you’ll obtain greater control and increased insight into employee related expenses.
The secret to success is, that you need to find an app that has made the final break with the idea of traditional expense reports.
Shelve the expense report – go transaction based
The classic expense report is based on the employee collecting and piling up receipts. The receipt piling can be based on a given business trip or a given time period. If the business hasn’t already digitized the process, the employee will register the receipts and fill out an expense report. This is then used by the finance department to reimburse (in case a company card hasn’t been used) and to book the expenses. All in all, this is a cumbersome and time-consuming process, both for the employee and the finance department.
However, many organizations have digitized the process. There’s just a paradox here, because many of the apps that’s available for managing expenses is based on the idea that the employee needs to do a traditional expense report. This is far from being the smartest and most effective way to work. This approach will typically create substantial workloads for the finance departments in the end of the month. And if errors related to single transactions are discovered, the complete expense report is typically rejected. This can give delays related to settlements and bookkeeping.
Instead, you need to look for an app that works transaction based. In other words, look for an app that supports submission of single expense transactions. I.e. an app that allows every single expense transaction that an employee might have, whether it’s a cash expense, a company card expense or a mileage registration, to be registered and submitted for approval right away. For example, if an employee buys two cups of coffee together with a customer, then it should be possible for the employee to register the expense and the corresponding receipt on the spot. At Acubiz, we call this Fast Track and it’s, hands down, the fastest and most effective way of processing expenses.
Real time = Real control
There’re multiple benefits if you dump the classic approach with expense reports and switch to a transaction-based approach. One of the main advantages is that you’ll start to build a real time (or close to real time) overview of the expenses. The traditional approach means that expense reports will arrive in batches. Either on a monthly basis or even worse, with a lower frequency than that. This means that you’ll lose overview of the employee related spend in the business. And if you have many employees with frequent travel activity, then this can account for substantial amounts. This can affect the precision in your forecasting and reporting on the cost side.
If your employee-related expenses are processed in real time, then you’ll continuously have the overview as well as the opportunity to implement technology that’ll help you spot suspicious transactions faster than you’ve been used to. We stock this kind of technology at Acubiz as well. If you operate in real time and have the right system for managing expenses, then it’ll also be possible to for you to work with precise cost allocation. If your employees handle every expense transaction when it occurs, then it’s easy to make them link the transaction correctly to an activity – for example a specific customer, a specific project or something similar. And who’s not dreaming about visualizing actual customer profitability based on precise allocation of all company expenses.
A behavioral change
Working transaction based with expenses will, for some, be a very different way of thinking the process. And you’ll maybe think, that it’ll be a heavy task to implement and create the necessary change and adaption amongst the users. Of course, it’ll be a mistake if you belittle the habits and routines that’s embedded with your employees.
However, with a modern, intuitive and user-friendly app for managing expenses, this won’t be a problem. Most of your employees already have access to smartphone technology and a well-designed expense-app will fully utilize this technology. Your users will be fast to capture the idea of registering receipts when they have waiting time – for example in the airport, in a taxi or something else. In Acubiz terminology, we call this Mobile First – the idea that every task related to expense management can be handled on the go.