A guest blog from our partners at Webexpenses
An effective expense policy is one that can evolve over time to match the changing needs of your business.
But how easy is it to manage evolving changes? How do you communicate policy updates across a workforce while staying on top of the administrative load that changes can create?
This is a challenge that many businesses have experienced recently due to COVID-19 and the need to rapidly update spending protocols for newly remote workforces.
It provided a litmus test of just how flexible expense management processes are and helped to expose some of the problems with traditional manual approaches, Webexpenses helps to explain further.
What is a manual employee expense management approach?
Manual expense management is the traditional way that employee expenses have been handled in the past. Claims are submitted using paper forms or a spreadsheet with proof of purchase provided by attached paper receipts.
All of this information will be sent to a central finance team who need to manually input the data, check the validity of each claim and ensure approved expenses get paid.
The expense policy will typically be a document that’s distributed to each worker or accessed via a shared drive or company server. If changes are made to rules, spending limits or expense categories, employees have to be alerted.
The problem with manual expense policies
One big issue with a manual process is how to effectively communicate any changes made to a policy document. Emails can be sent out, reminders pinned to noticeboards and paperwork updated but it’s really hard to make sure everybody knows.
The larger a workforce is, the tougher this task becomes. And any failure to communicate a policy change will create a host of problems with potential errors and disputes over claims.
Added to this is the admin burden of manually updating processes. Even something simple like adding or removing an expense category can become a time-consuming chore with multiple documents and spreadsheets having to be updated.
These problems deter businesses from updating their policies and create another set of risks caused by outdated rules and spending caps. The cycle then starts again.
How does digital agility improve expense management?
Technology has removed the barriers that once made updating a policy a risky and time-consuming task. Cloud-based and real-time digital management allows policy to be integrated into the process.
An expense system such as Webexpenses, instantly applies any policy changes that are made across a workforce. On-screen notifications and reminders inform people of changes at the point of use.
These notifications can require a claimant to confirm that they understand and accept a new rule or limit. The changes are automatically implemented so that an automated warning can also be triggered if a submitted cost breaches a policy.
How does a flexible expense process benefit a business?
The benefits of an agile approach were highlighted by the way some finance teams were able to cope during the recent pandemic. Webexpenses tracked user data across 2020 as businesses moved staff from office-based to remote work operations.
With a fully paperless process, 71% of submissions during 2020 were handled via the web portal and 29% using the Webexpenses app. It’s a flexible way to work which allows policies to be instantly updated and new categories created for homeworkers.
Despite all of the disruption to business during the year, expense management performance remained at 97.5% of pre-COVID levels. It helped finance teams to keep the finance function flowing during the toughest of years.
But it’s not just during a pandemic that digital agility is essential. The ability to easily update and adapt rules makes expense policies more effective. It allows them to evolve and change along with a business.
This is particularly important when it comes to handling business growth with a workforce expanding and the admin needs becoming more complex. It empowers the finance team to keep control of costs while giving employees a fair, efficient and transparent claims process.
It’s when communications are muddled and the ability to enforce policies is weak that problems can occur. Outdated rules and confusion over what’s allowed will help to create incorrect claims, disputes and general discontent.
Want to know more about automating your expense process?
Agile management and the ability to instantly update an expense policy is just one of the advantages that an automated approach brings. The flexibility is a byproduct of a fast and efficient process that removes the need for paper documents or the manual inputting of data.