Understanding the Top Challenges of Expense Management

At the macro level, there’s a lot affecting businesses when it comes to expense management. For example, international expansions and globalization are two elements that are influencing expense management, and also making these costs rise in many instances.

Expense management tips

According to the Global Business Travel Association, there will be an estimated four percent increase in costs this year, and businesses need to be prepared to address this general challenge, as well as many others.

One of the best ways to address most challenges of expense management is to choose the right expense report software. Along with keeping costs in check, the following are some of the other challenges businesses need to realize they’re likely facing, as they select expense management software.

Confusing or Nonexistent Policies

Before a company can derive much value from the use of expense management software, they need to ensure they have the right policies in place. Too often, expense management polices are confusing, or hardly exist at all.

Employees may be spending more than they should, or they may face issues that distract them while they’re traveling, all because they’re unclear on expense policies, or these policies aren’t clearly defined.

Having a specific and detailed T&E policy serves as a foundation for everything else related to employee travel.

It can be valuable to have the guidelines easily available to employees even when they’re on the road as well, such as through a mobile app.

Poor Visibility

Another significant challenge businesses face in terms of expense management is poor visibility into spending.

For example, a business might not even know where to try and cut costs because they don’t really have a clear idea of where employees are spending. It’s difficult to optimize spending or determine ROI for T&E costs without visibility.

Delays in Employee Reimbursement

If your company takes a long time to reimburse employees, they’re going to end up frustrated, angry and potentially not agreeing to travel for work anymore.

There are any number of things that can lead to delays in employee reimbursement, including inefficiency in your process, and not relying on technology to manage invoices. The more you can automate the process, the more quickly employees are likely to be reimbursed. When employees are reimbursed quickly, they’re in turn going to be happier to travel, and they’re likely to be more productive when doing so.

Errors

Human error can cost a lot of money, and lead to a lot of inefficiency. For example, incorrect expense information might not be the result of fraud, but simply mistakes. However, just because something occurs as the result of a genuine mistake as opposed to fraud, it doesn’t make it any less expensive or time-consuming to correct.

Again, one of the best and only ways to eliminate the risk of human error is through automation.

Finally, even for businesses with defined travel policies, enforcement becomes difficult. It can be expensive just to enforce the policies that are in place, and without enforced compliance, businesses are going to be spending even more. A software solution can create rules that are automatically enforced, which takes a lot of burden off the business.

Shares

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.