Classic Spend Management
They say, old is gold, but it may not hold good at all times.
Expense management still in businesses means, hoards of paper receipts, messy excel sheets, lengthy and tedious and validation procedures. Needless to say it's an archaic way of handling spends and expenses.
Before we get into the headaches involved in the old school way, let us understand how it works on a fundamental level
-->Employee makes an expenses
-->He/she collects the bills
-->He/she compiles an expense report
-->He/she submits the above for approval
-->If it is rejected, the employee is required to submit the expense report again
-->If it is accepted, reimbursements are sanctioned
Now one may wonder, what is so tedious about it. Well it is not (much) if one is looking at business of under 20 people. Now imagine a business that is in its growing stage and is adding on various cost over heads mentioned earlier with its manpower on a steady rise.
Now comes the below issues!
* Time, productivity and efficiency wastage – Lengthy hours spent on coming up with detailed and mundane expense reports could be spent on important work.
* Lack of visibility of spending trends – As there is no aggregation of data at any level, spending trends of any sorts is impossible, to gather which leads to minimal or nil reduction of avoidable expenses
* Increased chance of fraudulent claims – This can be accomplished with duplicate bills, exaggerated claims, false receipts etc
It is obvious that we need technology aided platforms to deal with the above headaches caused by classic spend management systems. But what good is an employee expense management software if it's not aligned with the expense policy of the business. In the next session we will understand the importance of the same.