At PayFit, we’re always trying to think of new and innovative ways to simplify the lives of our customers. This is why we’ve added a new expense policy feature within the app.
Listen, we get it! Managing employee expenses is not an easy job and a lot of it could be automated.
According to a YouGov study commissioned by Spendesk, expense management is the biggest pain point for finance teams. Altogether this is not all that surprising, particularly as the same study reveals that 20% of finance teams use manual expense reports.
Manual expense reports are as tedious as they sound. Endless back and forth emails; laborious data entry; and excruciating time spent processing, checking and then checking again to make sure that everything adds up correctly.
Of course, the other thing to consider with any business function that includes the word “manual”, is the room for error.
We humans are pretty good at lots of things. After all, we did invent the wheel, penicillin and the Premier League, but we’re not infallible.
In fact, we’re actually not that great when it comes to completing manual tasks, particularly those that require data entry.
According to spend management platform, Spenmo, each manual expense report can take up to 20 minutes to process. And that relates only to the ones that are filed correctly. Imagine the time spent administering an incorrect expense?
Well, you don’t have to. According to research conducted by the Global Business Travel Association, almost 20% of all expense reports contain errors, and in these cases, each report can take up to 40 minutes to be filed.
As we all know, time is money and very few people can afford neither the time nor the money of spending 40 minutes filing an expense.
So, if the manual expense reports take too long, are prone to error and cost too much, what have they got going in their favour?
Maybe they’re pretty good when it comes to monitoring fraudulent activity from rogue employees?
Hmmm. Actually, they’re not too good at that either.
A staggering 10% of UK employees admit to submitting false claims all the time, while a further 20% say that they do so on an irregular basis.
When we take a step back and consider everything, it becomes fairly apparent that expenses, and their administration, require a bit of a revamp.
Expense management in times of crisis
The predicted post-coronavirus financial crash is almost certainly going to impact the way that companies treat expenses.
While some may have previously been willing to let the odd costly expense slide, the chances are that the purse strings will be held quite a lot tighter moving forward.
But with this in mind, how can companies balance having a strict expense policy without setting themselves up for unnecessary administrative procedures?
There are two ways of doing this:
- Have a clear expense policy
- Use an automated expense management system
Define a clear company expense policy
Even the most conscientious of employees may make mistakes if a company’s expense policy remains unclear, confusing and open to interpretation. Equally, not having a concrete set of rules allows those employees with less moral fortitude to take advantage.
The trick here is to get everything written down in an employee handbook with real-life examples of what is acceptable and what is not.
Things don’t have to be complicated overly, and companies needn’t waste time writing down every possible instance; instead, the expense policy should be clear and concise and should act as a point of reference for any employees who continue to remain unsure.
Use modern technology
Just about every other business function has moved on with the times and has helped simplify the way that companies perform day-to-day operations. However, expenses still seem to be languishing behind.
Finance teams shouldn’t be wasting endless amounts of time going through receipts, working out if expenses are compatible with company policy, and then manually adding the sums to spreadsheets.
An automated expense management system has so many advantages that companies either choose to ignore or remain unaware of. For example, it can reinforce compliance, improve efficiency, enhance productivity, streamline processes, reduce workflows and produce more accurate data.
How can PayFit help?
Our product team has worked hard to produce our new expense policy feature with five major updates in the app:
What’s new about our expense policy feature?
① Admins can create a general policy for the entire company
② Admins can define policy for each type of expense
③ Admins can identify two types of alert - one for blocking and one warning
④ An employee will be unable to submit an expense or warned if it doesn’t comply with the policies
⑤ Both the admin and manager are alerted when an expense exceeds the policy
The goal of these updates is to allow admins to clearly define the company’s expense policy and create limits for each type of expense.
If an employee tries to add an expense that is outside of the company’s policy, the PayFit app will either block the expense from being uploaded or show an alert and require justification depending on the admin preference.
Equally, both the admin and affected manager will be notified that an expense has exceeded the policy.
An expense can be submitted manually or by taking a picture of the receipt, and thanks to PayFit’s robust optical character recognition (OCR) technology, the text is read automatically, and all mandatory data field entries are filled to create the expense. If the expense is submitted in a foreign currency, it will be automatically converted into your own currency at the actual exchange rate.
We want to make expense management easy, transparent and 100% reliable. This is why once the expense has been approved by a manager, it will get automatically added to the employee’s payslip.
No need to rub your eyes - you did it read it correctly. You can now manage payroll and expenses within the same tool!
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PayFit blog author