In today’s era of modern technology, automating expense management is the ultimate solution for optimizing business costs. Expense management automation automatically records, tracks, and analyzes all business expenditures and ensures they are compatible with regulatory standards. It leads to increased efficiency and productivity, improved compliance, reduction in errors and fraud, and increased cost savings among many other benefits.
This is crucial for businesses of all sizes, especially SMEs, to ensure higher productivity, compared to traditional expense management methods that are filled with human errors, inaccuracies, time delays, and inefficiencies. Expense management automation has multiple processes, such as receipt capture, automated expense report generation, compliance checks, approval workflows, etc.
Before committing to expense management automation, it’s important to understand the process of automating expense management, and the metrics to use to choose the right expense management software for your business.
To access the highest flexibility and customization, policy compliance checks, better approval workflows, and seamless integration with your existing digital infrastructure, look no further than the best HR and Payroll Software in Bangladesh: PiHR. Keep reading to learn all about expense management automation and discover why PiHR is the ultimate solution for all your expense management challenges!
What Is Expense Management Automation?
Expense management automation is the use of software to optimize, streamline, and automate processes relating to business expenditures. It leverages machine learning, AI, and technological tools, to provide optimized solutions for businesses.
Traditional methods of managing expenses are not scalable anymore in the era of technological revolution, which is why expense management automation is essential for businesses in this fast-paced, ever-evolving business landscape.
Expense management automation is crucial to monitor, manage, and calculate business expenses, as well as to process receipts, for regulatory compliance, and reporting expenses.
According to Fortune Business Insights, the expense management market is projected to grow from USD 7.6 billion to USD 15.2 billion by 2032, largely as a direct result of expense management automation.
Why Automate Expense Management?
When you automate expense tracking and management, you eliminate the need for manual data entry. As well as, you increase your efficiency and improve accuracy, save costs, and increase employee satisfaction. Let’s analyze the reasons behind why you should automate expense management.
Increased Efficiency and Productivity
You greatly improve efficiency and productivity by using automated expense management software. Streamlining the entire process means your employees don’t have to spend time behind manual, taxing tasks, hence they can focus on other optimization options to generate more profits for your company. Your expense management software will automate tasks and reduce administrative burdens.
Several expense management tasks can be automated, leading to greater efficiency. For example, you can capture receipts and extract data, check for policy compliance, and generate expense reports.
All of the aforementioned tasks become completely streamlined.
Reduction in Errors and Fraud
An automated expense management system is free from errors and eliminates the risk of fraud. Manual data entries and calculations often lead to errors and decreased accuracy. However, with expense automation software, all your generated receipts, analytics, and reports are sure to be completely accurate, since these are free from human error.
Expense management software can also help you renegotiate contracts wherever costs can be reduced. This is done through constant visibility of expenses, whereby you gain real-time insights into spending patterns.
Improved Compliance With Company Policies and Regulations
Manually handling regulatory compliance and matching expenses with company policies can be a tedious task. When you automate expense tracking, you allow improved compliance to take place. The automated expense report software will ensure all employees are operating under the same predefined set of company rules.
Since there will be a predefined, codified set of rules, any values above policy thresholds will raise red flags. If any violation of regulatory compliance has occurred, the software will automatically flag it. This leads to more improved regulatory compliance, compared to manual expense management.
Enhanced Visibility and Control Over Expenses
With expense report automation you have greater control over your expenses and also enhanced visibility. This consistent visibility gives you greater insights into your spending patterns, while also giving you real-time analytics about your expenses.
As a result, companies gain a comprehensive view of their spending trends, and utilization of budget. This can also help you renegotiate better contracts with vendors where you can clearly understand that there are ways to reduce costs. This gives companies access to greater financial control.
Cost Savings and Better Financial Planning
Cutting multiple avenues of manual labor reduces costs significantly for companies. With an automated expense reporting system, you don’t even need to train personnel to manually generate reports.
This greatly helps in slashing costs related to administrative fees and spares personnel from spending time behind non-value-adding tasks.
Improved Employee Satisfaction
The truth about the employee experience is that tedious manual tasks tend to bore employees. This leads to less job satisfaction and increased burnout. When you automate daily, menial tasks, and produce more accurate, optimized results, it leaves more room for employees to focus on tasks that add more value.
This leads to increased innovation within the company, driving more productivity, and an increase in job satisfaction.
What Is the Process of Automated Expense Management?
As we have mentioned before, an automated expense management system leverages AI, machine learning, software, and various tools and technologies to streamline and optimize the expense management process. The question is, how does it work?
1. Receipt Capture and Data Extraction
Rather than manually inputting receipts or data, employees can “capture” receipts on their mobile phones through apps or web interfaces, using the expense management software. The software can then extract relevant data, removing any need for manual capture or extraction.
2. Automated Expense Report Generation
The software will already encode a pre-populated list of possible expense options for the company. Employees can generate digital expense reports by selecting all relevant options from that list.
You can also add customizable features to your software for additional project codes or expense categories. The system will automatically input applicable expense details and receipt data in the report.
3. Policy Compliance Checks
The software will already contain company policies about regulatory compliance. This will include all policy thresholds, relevant expense parameters, upper limits for spending, and all other relevant information.
Any aberrant data that is beyond those predefined limits will easily be flagged by your automated expense management system.
4. Approval Workflows
Approval workflows are also established based on pre-defined rules and an existing system, according to the company. These approval workflows can aid approvers in reviewing all expense reports, documentation, and any policy compliance indicators from the data that is configured within their system.
5. Integration With ERP and Accounting Systems
You can easily integrate your automated expense reporting system with existing accounting and ERP systems. This strengthens the accounting department and improves coordination, as all relevant data is automatically synced with the rest of the accounting system.
6. Real-Time Analytics and Reporting
You can set specific pre-defined metrics on which you would like to generate reports. We have already discussed how having access to real-time analytics and insights can help you comprehend expense patterns and trends better. You can also look into budget utilization and policy compliance.
7. Processing Reimbursements and Audit Trails
First, the previously generated expense reports have to be approved. Then the software will proceed with automated expense reimbursement. Depending on what your company policies are, the software can generate reimbursement requests, track reimbursement status, and also send timely notifications to staff about outstanding payments.
You can also send reimbursement checks or directly transfer funds electronically.
Traditional vs. Automated Expense Management
We have broken down several benefits of automated expense management. However, the question still lingers: is automated expense management superior to traditional methods? We have formed a comparison table below to break down why we think it is.
| Feature | Traditional | Automated |
|---|---|---|
| Time and Efficiency | Traditional techniques are more time-consuming and less efficient. They have to be done manually by personnel. | Automated expense tracking uses software that can quickly and efficiently manage all expenses of the company. |
| Accuracy and Error Reduction | These techniques are more prone to human error, as inaccuracies may happen during data input. | Expense software automation eliminates the chance of errors since the software does all the calculations, it is free from human error. |
| Data Handling and Visibility | Real-time visibility is absent due to manual data handling and report generation. | You can have real-time insights into expenses and consistent visibility, as a result of seamless and accurate data handling. |
| Employee Experience and Satisfaction | Employees are often dissatisfied and burned out due to being overworked with menial tasks. | Employees feel more productive and can focus on value-adding innovative work. |
How Do You Choose the Right Automated Expense Management Software for Your Business?
So you have decided to opt for automated expense management, that’s incredible. The lingering question is: how do you know which expense management software is the correct one for you?
Flexibility and Customization Options
The best expense management systems have to be flexible and scalable according to your needs. Most importantly, each company functions differently. Therefore, there must be customization features available.
If you want to add different categories to expense management or input a specific template for report generation, you should be able to do that.
Security and Data Privacy
When searching for expense management software, you should look into ones that promise high data protection. Your valuable data should be password-protected with layers of encryption using the latest technology.
Ease of Integration With Existing Systems
Not all expense management software will function in tandem with your existing digital infrastructure. You should choose a system that integrates well with your existing accounting and ERP systems for better use, easier transition, and smooth data syncing.
Real-Time Monitoring and Reporting Capabilities
When you have access to real-time data, you can easily monitor your expenses, and increase reporting capabilities by instantly flagging any fraudulent activities. You also gain valuable insights into your expense patterns. Hence, your software must have top-notch real-time monitoring options and reporting capabilities.
Customer Support and Training
You must always consider customer support when choosing software. Look at online reviews, or consult with past clients of said vendor to assess their reputation.
Return on Investment (ROI) and Cost Considerations
We cannot understate the importance of choosing software that’s within your budget. You need to consider whether investing in this software will be beneficial for you, and what your return on investment will be.
What Are the Key Features of PiHR Expense Management Solution?
PiHR is widely considered to be the best expense management software in Bangladesh. Boasting over 4000 happy clients and several years of experience under our belt, we are revolutionizing expense management automation in Bangladesh with our innovative solutions.
Our automated expense management software has the perfect combination of features for businesses, which will allow you to increase profitability by significantly streamlining and optimizing your expense management practices.
- Claim for your expenses through our software. Easily capture and record receipts, submit your expense receipts through the app or web interface, and allow the software to extract relevant data. You can also store office expenses through claim.
- Claim Category prevents any unseen or unaccounted-for expense from occurring. Admin can generate any categories for claims, which they can subsequently use to submit claims.
- Claim reports are easily generated using our software. We can provide completely error-free, accurate calculations.
How Do You Implement Expense Management Automation in Your Business?
In addition to learning all about the benefits of expense management automation, you also should recognize ways to implement expense management automation in your business. How exactly can you achieve that?
Set Clear Business Goals
The first step should be to look at your expense management practices and look at bottlenecks, or any areas that need improvement. This will allow you to look at cracks in your system, and understand which areas can be improved.
Consequently, you can set clear business goals to work toward efficiency and productivity and fix those cracks that need fixing.
Engage Key Stakeholders and Gather Insights
You need to engage all the key players in your company who will be potentially affected by the changing landscape of expense management. Bring your accounting, finance, and HR departments on board and dissect the problems you are witnessing.
Also, gather insights on how manual, tedious expense management processes can be optimized and streamlined.
Evaluate Technology Needs and Choose the Right Tool
When you are thinking of incorporating technology into your business, you need to ensure you have the right infrastructure for it. Besides that, analyze your budget and what software and technology tools you can acquire within that. Your IT department also needs to be well-equipped to handle the new software.
Look into storage solutions, dissect what ledger and accounting software you are currently using, and if the new software you think of installing will be compatible with your current technological infrastructure.
Conduct a Pilot Test and Gather Feedback
You should do pilot tests and trial runs to understand which vendor is the best fit for you. Most expense management automation software gives the option of clients to access free trials or demo versions.
Customize the Tool to Fit Business Processes
The best thing about modern applications is that they can be customized according to whatever the client needs. There is never a one-size-fits-all solution when it comes to business, and hence you must choose the software that allows for customization. Then, you can customize your expense management software according to your needs.
Train Staff and Ensure Smooth Adoption
Once you have selected your software, you need to train your staff for a smooth transition. Provide training modules to your staff. Most software companies have training modules, consultation options, and good customer service. You can use all of the aforementioned resources to train staff and ensure the transition from traditional to automated expense management is smooth.
Monitor Performance and Adjust as Needed
You must always monitor and evaluate performance after the software has been implemented. This will allow for continuous improvement once any bugs or problems are seen. Once you find something in the system that’s not working for you, you can easily adjust it!
Final Thoughts
Expense management automation is an essential tool in your company’s toolbox, which will ensure a plethora of benefits for you. With an automated expense management system, you can reduce costs, increase employee satisfaction, reduce errors and fraud, and improve compliance.
Moreover, receipt capture, approval workflows, policy compliance checks, processing reimbursement reports, and gaining real-time expense insights are all made seamless. All you need to do to access all these benefits is to just find the right company.
If you are looking for the best expense management software in Bangladesh to revolutionize your company today, look into PiHR.
