Expense Automation • 10 min read
Why expense automation is necessary in 2020!
By Rajveer Singh
Published July 17, 2020
The world has come to a halt as an inevitable virus sits beside us, creating grave uncertainties in our prospects. Businesses around the world are dealing with negative revenues and interrupted supply chains as factories are closed down, and quarantine measures are being adopted worldwide, thus restricting global movements.

Still, affirmative it is that sooner or later, we will crawl through the hurdle (as we have done a thousand times before), and possibly mold ourselves to live in synchronization with our guest. Eventually adapting to the new normal!

The next few years will make us witness some crucial changes in the economic outlook of companies. Retardation in the revenue-generating capabilities of the corporate world will alter the financial workflow of businesses around the world. Companies will have to check on their expenses, and will certainly have to manage their resources with tight hands. Crucial amendments could be made in businesses to keep a check on their incurred expenses, by introducing systematic procedures for administering their budgets. Corporates are switching to broader and more agile expense automation software, to keep their financial operations healthier and more transparent, in a post-COVID-19 world.
IDEA BEHIND AN EXPENSE AUTOMATION SOFTWARE

A business, be it small or one with global footprints, requires capital to run its operations uninterruptedly. Every business incurs several expenses daily. These incurred expenses are necessary for the business to be up and running. With an expansion of the business, the amount of spends, and the number of spenders increase simultaneously.


Often there are times when the employees incur personal costs to keep the functioning of the company at a constant pace. These spends by the employees from their personal pockets are a liability to the company, and it is entitled to reimburse them as soon as possible. However, traditional reimbursement practices are dawdling and frustrating, as they include paper receipts, and spreadsheets. Moreover, reimbursements through such traditional practices are tiresome, and can take a lot of time and effort. This results in a lot of inconvenience, thus draining the working efficiency of every employee. Sometimes employees use the company credit cards, but this process too is no less monotonous than the former.


An expense management software (or an expense automation software), in its very basic terminology, is a module that can help employees manage and report their business expenses with great ease. Additionally, it also helps the people who deal with the financial aspects of a company to manage expense reports, reimbursements, and related issues. The basic purpose of an expense management software is to simplify the path a company takes to direct its flow of capital within the employees. Expense management software implies a hierarchical approach to distribute the company's monetary resources. By this, it diminishes manual interference and automates the complete financial workflow. Later in the section, we will have a detailed look at how an expense automation software works.


INEFFICIENCY OF TRADITIONAL BUDGETING METHODS

Traditional ways of tracking and managing your company's spending could perceive you to think that you are in the 20th century, manually working on spreadsheets, bank statements, and paper receipts. These traditional and tedious efforts are also susceptible to human error, and it's a real challenge for the finance teams to get an exact number of your company's expenses. A real and exact account on the company's budgets can help managers to take profound administrative decisions for the organization's benefits, but with such conventional practices of managing expenses, it is near to impossible. This lack of data results in slow reimbursement processes, gradually resulting in a decline in employee morale, an increase in organizational disputes, mismanaged workflow, and henceforth lowered productivity.


Moreover, when it comes to reimbursements, paper receipts work as sole proof from the employee side. Unfortunately, paper receipts can be feigned and manipulated. Generally, companies pay no consideration to their spending policies, and as a result, even the employees are not concerned about the unnecessary draining of the organization's budgets. Such inefficacious practices can lead to out of policy expenses, incurred by the employees, on the company's cost. While approving receipts for reimbursements, there is no solid way for the finance teams to check on the authenticity of the receipts. This can result in an increment in the number of organizational frauds, and that too, all of it goes unnoticed. Also, irregular and variable expenses are too small and less frequent for finance teams to get involved, so they are left entirely in employees' hands. Now the problem here is that generally there is little or no communication between the staff associated with different departments. This results in duplicate or unnecessary purchases and since they pay using cash, from their own pockets, or with the company credit card, it becomes difficult to spot if there has been any sort of overspending.


Adding further to the miseries of the finance teams, they sometimes need to run around and ask the employees to submit their receipts on time, and eventually, at the end of every month, the amount of work that the finance guys need to do is overwhelming. Consequently, because they need to adhere to certain deadlines, they have to turn a blind eye towards all the suspected receipts. A lot of considerable time and effort is thus wasted on a work that could have been done more efficiently and easily. Alternatively, sometimes employees use company credit cards for carrying out business expenses. But in terms of managing data, even this is not an efficient process, as almost all credit cards provide bank statements every month. This could force the finance team to do the reconciliations during other important deadlines.


Above all, employees themselves don't prefer filing receipts, and generally, they postpone it to the very last minute. The finance teams have to often extract the data from the receipts and input them manually into spreadsheets. All this wasted precious time, counting other's dime.
"Most of us spend too much time on what is urgent and not enough time on what is important."
Stephen R. Covey


Fortunately, fintechs around the world have been offering efficient solutions for quite some time, but the urgency by companies on adapting one has soared during the last few months. As the world shifts its gears to the work from home approach, managing company expenses has become a task more difficult than ever before. Controlling your business spending being remote includes snags such as irregular filing of receipts by employees, lack of transparency in the authenticity of the bills, and sluggish reimbursements. But an expense automation software can put an end to all these primeval and static fiscal management practices.
HOW DOES THE CORPORATE EXPENSE MANAGEMENT WORKS?

The 21st century is the time of making everything digital. Employees also expect that all the work-related stuff must be automated to the maximum extent, thus reducing their workload. Expense management software empowers employees with great independence by providing them with financial tools that do away with the tedium of expense reports, and reimbursements.

A versatile expense automation system can provide virtual and real spending cards to every employee of the company. All these cards can be configured with built-in budgets, and spending limits. These budgets and spending limits can be monitored and controlled by financial resource managers in the company, by desktop interfaces and mobile applications. From creating group budgets to authorizing individual spending, the software and the cards are crafted in such a way to minimize the complexity of the complete financial workflow of the entire organization. With user-interface as easy as possible, the applications and software are a must to have tool for every company out there.


The basic ingredients of an expense automation system are desktop software, mobile application, and payment cards. These payment cards can be both real (physical) and virtual. Every employee in the company can be equipped with a separate payment card. The employee, when he needs to incur an expense for the company, can request the administrating manager to top up his card with a certain balance, as per his need. This request would instantly pop up as a notification in the manager's mobile application and desktop interface. The manager can then approve or reject the request as per his consideration.


The financial managers can also prefix a specific budget in any card and allot them to a team for group projects, following the requirements. They can set recurring payments on specific dates, and can also delete a card anytime. All the reports of the incurred expenses through these cards will be presented in a detailed and organized manner to the accounting manager in real-time. That is, the manager can see an expense, the time it was generated. The employees can also snap the receipts, and just with a few categorization clicks the receipt will be uploaded in the software. So it eliminates the need of running after the employees and begging them for the receipts at the end of every month. The expense system can also be configured with major accounting software like Xero and Quickbooks.


VARIOUS EXPENSE CATEGORIES AND THEIR AUTOMATION PROCEDURES

When it comes to corporate cards, they are generally presumed to be limited with business T&E expenses. But Volopay cards are much beyond that, and it's true that employee's T&E expenses are the last thing to come in anyone's consideration during the current dramatic scenario, but businesses work even without travel and entertainment expenses. In other words, apart from these expenses, there are several other spends that a company incurs daily. And now, since most of the corporate world is working remotely, it's a big challenge for the finance teams to administer the expenses, while empowering their employees to work independently.


Some common business expenses could include office and administrative expenses, travel, software subscription, advertising, expenses incurred on food, consultants, and many more direct or indirect expenses. Let us try to unshackle the automation procedures of some of these expenses in detail.



  • Office and administrative expenses: A business may have one or many offices for its work operations. Each office requires certain types of machinery and services for the continuation of work. These can be computers, air-conditioners, printers, and of course the services required for the maintenance of these tools. Essentially, the expense would be incurred on these tools and services, for an uninterrupted workflow. Now, these expenses must be on the company's cost, and regional officers can set budgets in the cards for the teams to carry out these necessary expenses with ease.


  • Travel expenses: At expense management systems such as Volopay, the cards are backed by VISA, so they are accepted globally. Before boarding for a corporate journey, the employee just needs to ask the manager to set a budget onto his card, and he is ready to go. Wherever and whenever the employee will spend from the card, a real-time report will be presented on to the manager's software interface. By this, the need for reimbursements is completely eliminated. Moreover, if somewhere, the employee is unable to pay from the card, (though this rarely happens) then he can just snap a picture of the receipt, and upload it on to the software. The versatility of the software is so broad that using Artificial Intelligence, it can detect any kind of manipulations (if there are any) in the uploaded receipt. Imagine that you witness a rise in your travel-related expenses, then on your dashboard, you can track exactly the spending patterns of your staff, and if you think that they can be optimised to reduce, then the better data insights using Volopay can help you make better-informed decisions.


  • Software subscriptions: A business uses several software-as-a-service solutions to keep their work running. One has to pay for these software subscriptions on a timely basis. There are tens of software, a company uses daily. Now, it is very difficult and inefficient to manage all these subscriptions manually, and one may eventually end up paying more by subscribing for similar software, which serves the same purpose. Using virtual cards, one can set an automated recurring payment that would pay for these subscriptions automatically on a certain date, so one does not need to manually dive into these subscriptions, and their payment deadlines. Further, the expense management software can also notify you if you are paying for any unnecessary software, or if you are paying for two similar software that are serving the same purpose. This ability of expense automation, apart from saving you a considerable amount of time, can also help you save money.


  • Advertising expenses: Digital and online marketing has more or less replaced traditional advertising channels. Facebook, Google, LinkedIn, Twitter, and Quora to name a few. Marketing managers need to manage all the digital marketing resources with complete efficacy. The amount of expense that is incurred upon marketing on these platforms can be significant, and thus requires a systematic approach to control the draining marketing budgets. One can manage and track all of the paid marketing campaigns, across various channels on a single dashboard. Volopay provides precise transaction tracking of these marketing expenses. One will exactly know, where the budget is being spent in real-time, no matter where one spends, as each card is assigned to the mentioned person and budget is prefixed, so you'll always know what you've spent, and what you have left. Also, using the same corporate card for all advertising spend is somewhat risky and thus managing your campaigns becomes a bit strenuous. Volopay virtual cards create distinct expense details for each incurred spend, and also these cards are not linked to your bank account.


  • Food and other expenses: Office managers also need to buy snacks and supplies in-person. Volopay's prepaid cards mean you always have access to the company's money, without having to rely on those outdated payment methods. It's just as easy to buy things, and there are absolutely no concerns regarding security.


Financial managers can also create single-use virtual cards for temporary tasks and projects. After the completion of the respective project, the card can be deleted immediately. By this, they can mitigate the risk of overspending, while enabling your employees to access the company's fund quickly.


The amount of time a company spends on generating expense reports is considerably huge, and all of it is burnt despite knowing the fact that there are incredibly efficient solutions that address the exact issue entirely free. Switching to automated expense management software can help save companies and businesses this huge amount of time, so they can dedicate themselves by focusing more on other crucial revenue-generating tasks for the company.


Unfortunately, no one can precisely predict what Covid-19's aftermath on businesses will ultimately be. Various researches are suggesting that the economic impact of the COVID-19 will be there with us for years. And the finance teams around the world are expected to shield their businesses from the recession that follows. During such times, it is relevant for companies to have real visibility over their wide and remote spends. Dubious expenses are more pervasive, and physical distances will result in difficulties in keeping sights on who spends what and why. With Volopay, you can enable notifications for every incurred spend, this will ensure that you know every dollar that leaves your business. You will have a crystal clear view of the financial being in one dashboard –something that is impossible with corporate cards.


Adjusting your company's growth projections and implementing optimized spending practices could help companies from the imminent economic shockwaves. Empowering your employees to work safely being remote and having a strong grip on your spending will help you to prepare on your way to cruising uncertainties.


Implementing software like Volopay can surely help your business save significantly, so that you can invest more in expansions. Further, implementing our system in your financial practices hardly takes minutes, and you will be up and rolling without any serious paperwork. If your business is at a relative stalemate because of the pandemic, probably it's a great time to reconsider your spending practices and get better preservation for your company's cash flow.


In the end, teams need to adapt to the changing circumstances and improvise for the best. The only bad this could have is expose the risks related to your traditional orthodox fiscal practices….For the positives, it can have all those benefits to your organization.



We are keen to help every business out there to sail through these difficult times. If you have any doubts regarding how you can implement the above mentioned financial practices, just visit Volopay and book a slot for a free demo today!




Related Articles
Switch to smart, trackable spending
GET STARTED