January 10, 2018
In a small to mid-sized business (SMB), one of the most controllable line items on a budget is employee expenses. Getting control of your expense reporting can mean the difference between your bottom line shifting from red to black. And if your employees are already using email and scheduling appointments on their phones, it's not a stretch to have them use their phones to track and submit expenses as well. If your employees are still taping receipts onto a piece of paper to request reimbursement, 2018 should be the year you make the shift to a cloud-based expense reporting system. SaaS programs and their apps are simple to set up and easy to set up.
The Aberdeen Group has estimated that businesses can reduce their expense-processing costs by 60% to approximately $7 per expense report.
Cloud-based expense reporting improves the profitability of both your on-the-road team and your back office team. The increased efficiency that comes when your team isn't spending excessive time on administrative tasks like taping, scanning, uploading, and filling out spreadsheets leaves time to focus on money-generating activities like sales and product development. These technologies also cut admin work for your finance department and improve accuracy throughout all steps of the process.
Cloud-based systems also cut the turnaround time for the submitting, approval, and reimbursement process. A side benefit: you'll have happier employees because they aren't floating expenses for weeks at a time while your accounting team cuts checks.
To keep your finance department happy and in compliance, you'll need a system that offers data storage in the case of an IRS audit. Most systems will save your data for the requisite seven years, and some even longer.
How does it work (the short version):
Team members will use the expense management app to take photos of their receipts as they travel or purchase office supplies. The OCR (optical character recognition) extracts all the meaningful data, eliminating the need for data entry on either end. The team member in charge of expense approval can then view and approve expenses with a swipe. No more taping receipts, scanning, and spreadsheets required.
What to look for in an expense reporting software:
1. Make sure it integrates with your accounting system. This is the most important factor to consider when choosing an app. If you're using QBO or Xero, this likely won't be an issue, but if you're using an enterprise system, you'll need to do some research.
2. Ensure the app will work on all smartphones.
3. If your employees travel out of the country for work, make sure the system you choose allows for foreign currency conversion.
4. If you use corporate cards, verify that there is integration.
5. Automatic ACH payments will allow you to directly drop the reimbursements into your employees' bank accounts. This cuts down on check cutting costs and time, and your employees get their reimbursements more quickly.
6. Auto-categorize expenses. If they offer auto-categorization, the system will read the Uber receipt as transportation and the Starbucks receipt as food and beverage, saving time on needless clicks.
Other features you may want to look for: real-time reporting and mileage tracking.
Some of the ones that meet most (if not all) of these requirements are Receipt Bank, Expensify, and Xpenditure. If you'd like help in setting up a cloud-based expense reporting system, we can help review the best options for your business. Contact us here.
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