The time has come to retire expense spreadsheets
Expense management software adoption continues to grow, but a recent GBTA survey showed that 46% of business travelers are still required to submit their expenses manually, using receipts stapled to a printed spreadsheet, then sending them to the finance team.
NB: This is a viewpoint by Ted Stavropoulos, director of partner channel development, Chrome River.
There are several reasons that companies have not adopted expense automation solutions – maybe they think that they’re too expensive, that spreadsheets work adequately, or that their company is too small for them.
While these may seem valid on the surface, they miss many of the financial and operational benefits that expense automation offers organizations of all sizes, as well as some of the potential perils faced by those who maintain manual processes.
Here are three of the most critical reasons why companies can no longer afford to use spreadsheets for expense management.
Slow processing and approval, and high admin costs
The cost to manually submit, process and reimburse an expense report has been calculated as more than $26, compared to $7 for a fully-automated solution.
The need for all details to be manually entered on spreadsheets, mailed, then verified, then approved, makes this a highly labor intensive process.
In addition, the need for paperwork to be manually filed and shipped makes it a very time-consuming process, which further slows down reimbursement times.
Harder to prevent expense fraud
Employees submitting overinflated or outright fraudulent expenses is a $2.8 billion problem in the US alone. In order to effectively combat fraud, organizations using spreadsheets to manage expenses would need to manually verify that every expense is legitimate before approving it. Has this month-old receipt been submitted before, or did the submitter just discover it in their laptop bag? How do I know the true mileage between two cities than an employee drove between?
This is, of course, completely impractical to police and is massively time-consuming to administer.
Limited enforcement of compliance
While some areas of travel policy (such as the cost of a lunch) are easy to track and enforce, there are many others, such as travel day per diems or class-of-flight restrictions, that can be time-consuming to verify when entered on a spreadsheet.
Company-specific regulations, such as booking flights less than 14 days out, can also prove a headache to enforce, and can often be overlooked by stressed admin staff. These can lead to companies losing tens or hundreds of thousands of dollars per year in poorly-enforced travel compliance costs.
These three issues barely scratch the surface of challenges posed by manual expense reporting systems, whether it’s money wasted through inefficient process, or other issues related to poor cost control practices.
In addition to the clear cost-saving benefits that automating these manual processes can deliver, implementing an expense management solution can deliver wide-ranging benefits, ranging from more effective travel policy enforcement to the ability to identify opportunities for cost reductions.
To learn more about the challenges of manual expense processing, download Chrome River’s white paper, Common Pitfalls of Manual Expense Reporting.
In addition, Chrome River and its partner US Bank will go into more detail on an upcoming webinar, Top 5 Benefits of a Travel and Expense Management System, co-hosted with Tnooz.