GUEST BLOG: How manual expense reporting is killing your finance team’s efficiency

When people think about manual travel expense processing, the first thing that comes to mind is the weary road warrior, spending hours on arts and crafts projects, stapling or taping receipts to printed spreadsheets. It can be a painful, inefficient task. The last thing a business traveler wants to do at the end of the month is try and remember where all their receipts, are and then spend hours filling out a spreadsheet.

While this is certainly what most people think of when talking about the efficiency challenges presented by manual expense reporting, the reality is that the approval and reimbursement process are far more impacted. The most obvious element of this is that manual processes take far longer than those which are automated. From getting approval on expense claims to keying data into an accounting system, each step drags out the amount of time it will take to reimburse staff, pay corporate card bills, and bill clients.

The perils of inter-office mail

The first step to get an expense claim reimbursed is getting it approved. For small, single-office, companies, or those with straightforward approval processes, this may not present too much of a challenge. Put the spreadsheet/receipts in the finance person’s inbox on their desk, they drop it off with your manager to sign it off, and the manager then writes “OK” on the header sheet and puts it back in finance’s inbox, ready for reimbursement.

However, add in any variable, and it can soon become a considerable challenge. If the approver is in a different office, the paperwork needs to be scanned, faxed or even mailed (the horror) to the approver, and then back to finance once approved. And what if it’s over that approver’s limit so needs to go up a level, or if there are multiple GL codes, requiring it to be approved by someone else (common for professional services companies)? The potential for huge approval delays increases significantly with each stage in the process. To top this all off, keeping track of where a specific expense claim stands in the approval process can lead to an extremely frustrating game of telephone.

The complexities of policies and approvals

Most people who travel for business or approve their employees’ expenses know how much can be submitted for a travel meal. But what if that meal is in Sao Paulo or Shenzhen, instead of Surbiton? With different reimbursement rates for each location, or perhaps translating a meal cost from reals or euros into dollars? That will likely not be something the approver knows of the top of their head. If a plane ticket looks abnormally expensive, why was that? Was it booked less than 14 days in advance, and if so, why was this? Were there cheaper fares available on other carriers?

Each time an approver needs to refer back to the company T&E policy or dig through receipts to get to the bottom of a query adds further delays to the process. Maybe only 10 minutes or so per claim, but if an approver has multiple claims to approve, it can quickly become a major time suck.

And what if an employee has a £2,000 business trip report that needs approval, and everything looks fine apart from a single line item? Maybe it’s just one evening meal that’s £50 over the policy’s limit. Does the approver just wave it all through in order to get the employee reimbursed in time, or do they hold up the entire process by going back and forth with the employee over email to get an explanation of why the expense was over the threshold? One risks policy enforcement issues, and the other increases the potential for delays in reimbursement, which can impact employee satisfaction.

The trauma of tick-and-tie

Many companies provide frequent travellers with corporate credit cards. While these can be a major boon for employee cash-flow, they can prove a major headache for finance teams. Although employees have their receipts from the hotel, restaurant or store and attach these to their claim, the card transaction data comes directly from the processor to the finance team. They then need to manually verify that each transaction has a corresponding receipt in order to process the card payment. This manual tick-and-tie process can be extremely time-consuming, and can also lead to a significant amount of back-and-forth with the cardholder, in the event of missing receipts or transaction queries.

The frustration of fat-fingered data entry

Manual data entry is a laborious, thankless task. It’s also fraught with the potential for errors to be introduced into the process. From the weary traveler who inadvertently types the wrong amount on their spreadsheet to the finance team member who mistakenly enters the wrong billing code into the accounting system, the potential for mistakes is endless. Not only can this lead to over-/under-reimbursement, but can also cause clients to be billed incorrectly, or budgets to become out of whack with actual spend. This can cause accounting and client relations challenges, and can also be very difficult to track down and rectify, without any type of audit trail.

Conclusion

These delays and inefficiencies cost companies many thousands of dollars in employee time, which could otherwise be spent on more high-value tasks. They can also have a knock-on effect on both employee happiness and the ability for finance directors to perform quarter- and year-closing. Regardless of the countless higher ROI benefits that an expense automation solution brings, simply eradicating all of these inefficiencies can themselves offset the investment in the technology. 

Bill Hanfrey is partnership director, Europe at Chrome River Technologies, who is exhibiting at Business Travel Show on 20-21 February 2019 at Olympia London. Register for free at www.businesstravelshow.com/register