What is Expense Management and Why is expense management important?
What is Expense Management?
An expense management process is used to help businesses streamline their expenditures.
It is the sequential flow, through which claims for reimbursements & records for employees’ business expenses are processed within the industry.
Expense Management Process
The Expense Management for a business involves three steps:
- To process the reimbursement requests.
- Pay the requested amount after approval by managers or designated professionals.
- Audit the business expenses along with maintaining proper records.
several issues occur When expense claims are report manually. When expense claims are reported manually then several issues occur.
which leads to loss of time & adds up to the cost of the company.
Issues in managing expense claims manually are as follows:
- Errors in Manual data entry
Each expense report has to be entered manually by the employee. Finance Department follow same which makes the process prone to errors. an organization faces risk if Wrong amounts approve.
As per the survey, the average error rate in manual data entry is 1.5%. which means that for every 200 entries, 3 incorrect amounts employees claimed.
This error exudes deep into the financial statements of the organization, the accounts team takes hours to trace.
2. Loss of Supporting Documents
Claiming expenses is the most tedious activity for any employee.
it is always hard for the employees to get the receipts in order.
Even if they do store the receipts properly, the data on the receipts is not visible after some days. so it’s as good as having no receipt.
A company’s policy does not allow an employee to claim the expense, without the supporting document to authenticate the validity of the transaction.
Hence the employees end up losing money or may have to resort to fake supporting documents.
3. Time Consuming
The main purpose of an employee to join the organization is to add value. through the core business of the company and not engage in activities that do not add value.
Claiming expenses manually adds to the workload of the employee, and hampers productivity in the normal course of action.
4. Checks based on policy
To add value, every organization must move towards automated Expense Management Software in Dubai which will help to bring overall growth to the organization.
Why is expense management Software important?
Over the last few years, expense management involved storing papers – bills & receipts, multiple record sheets containing claims. Dull procedures of validating the claims and approving the submitted expense reports.
Such a process tire the employees of the Accounts/Finance department instead of taking up progressive tasks.
Using traditional process to manage the expenses may seem feasible for organizations, with a limited number of employees, but eventually, this could prove adverse to a growing business.
The Bottom Line
An automated Expense Management software helps to ease out the process of expense tracking, as well as expense reporting for a business.
However, it also proves to be more efficient with finance teams to record and manage business expenses for accounting.
In conclusion In this technological era of automation, automated Expense Management software is a state-of-the-art tool, that saves time and resources in a compliant and user-friendly way.
