The essential guide to expense management automation.
The essential guide to expense management automation.
How expense automation drives growth.
If the last few years have taught businesses anything, it’s that change is constant. We got a taste of the true urgency of that fact during the pandemic when business travel came to a halt, workers overwhelmingly went remote, and then started traveling again in a very big way soon thereafter.
Because of this sharp uptick in travel and expenses, the impossible struggle to manage all of this work manually cannot be the status quo going into the future. With so many people, systems, and geographies, controllers can’t ignore the outdated and tedious processes, like paper expense reports required, just to meet compliance mandates.
“One of the biggest challenges is just the continuous change that is happening in business,” says Gary Meisner, Principal Value Management Consultant at NetSuite, whom we interviewed for The controller’s guide to automating compliance. “So, how do you maintain an environment where everybody is even aware of all the compliance requirements, the regulations, and the approved business processes?”
Even before the pandemic, expense reconciliation was a difficult and inefficient process, prone to errors and uncertainty. The receipt chasing was endless and closing the books took far longer than it should have. In this article, we’ll address how expense automation minimizes those challenges.
Understanding expense management automation.
Traditionally, most steps in the expense process were manual. Employees had to submit expenses individually, keep track of their receipts, submit the requests, and then managers would review and approve one by one. With the benefit of modern apps, all of those manual steps can be automated.
So what is expense management automation? Automating expense management involves implementing systems and processes that streamline the requests, approval, and oversight of expense reports. The latest software allows companies to do this by replacing nearly every manual step in the process outlined above with an automatic action performed by the software itself.
But why go through the process of automating expense management if many of these tasks are already being done by humans? That’s the “if it isn’t broken, why fix it” approach. The problem is that expense compliance is broken.
According to Meisner, “Companies should be looking for tasks that are repetitive, time-consuming, and prone to human error — tasks where there's great risk and little value being added.”
He continued, “As you look across all the different initiatives you manage, the more that check those boxes, the more you're going to want to figure out how to automate them.”
The transition to paperless expense management.
Historically, manual expenses involved a large amount of paper, from receipts to printed spreadsheets and beyond, which naturally introduced inefficiencies. Receipts can be lost or torn and human error is to be expected with any manual processing.
Receipt scanning tools that allow employees to capture and submit receipts digitally are a huge benefit to the ways an organization achieves expense automation. You can leverage optical character recognition (OCR) technology to extract relevant data from receipts in any language and validate against expense claims.
But most spend happens on the go, so finding the time to capture and upload receipts can be difficult. What if receipts were automatically included with transactions? Employees could transact with common vendors and a virtual receipt will auto-attach to the transaction. This effectively automates receipt generation and reconciliation with submitted expenses, identifying discrepancies and potential fraud along the way — with no physical paper needed at any point in the process.
The benefits of automated expense management.
In a recent Brex survey, 32% of companies said that both slow reimbursements and time-consuming approvals were challenges of their T&E programs. Thirty-one percent of respondents expressed problems integrating with other software, such as accounting systems, and 29% highlighted difficulty with employees failing to submit documentation for expenses.
But what if you could achieve up to 99% compliance and save your teams as many as 4,000 hours a year?* Would you do it? That’s one of the many benefits of expense automation. It allows you to embed your policy everywhere spend happens, automatically enforces policy rules, auto-generates receipts and memos, and can learn your policies over time and dynamically suggest accounting rules.
For employees, expenses become less troublesome to report and reimbursements come back to them faster. For finance teams, when documentation compliance is high, closing the books is less of a burden every month. And for the business overall, automated expense management leads to both time and money savings.
Simply put, policy enforcement after the fact is difficult and slow, while enforcement before spend has even occurred saves workers’ time and the company’s money, and avoids the headache for users and administrators alike.
*The metrics provided are from July 2023 and for illustrative purposes only. Past performance does not guarantee future results, which may vary.
The role of AI in expense automation.
Don’t waste hours reviewing every global expense and risk missing ones that actually need a closer look — let artificial intelligence assist you.
AI can act as your team’s tireless teammate, as capable as the best external firm you can hire in the industry and can instantly internalize every single data point in your company — a monumental task you'd need to pay an army of associates to pore over the books to accomplish.
You can also set up automated approval workflows based on predefined spending thresholds, hierarchies, and policy rules; implement an electronic approval system that enables managers to review expense claims digitally; and even add notifications and reminders to ensure timely approval and minimize bottlenecks.
Navigating the complexities of global expense management.
Today’s businesses are increasingly global and distributed, creating operational complexity. You may have overseas vendors, employees and contractors in different countries, or global subsidiaries subject to local tax regulations. Whether you have a finance team in each location or you’re handling it from HQ, managing global spend can be manual and time-consuming.
Automation simplifies global expense management no matter where in the world you operate. One consistent, consumer-grade experience that automates expenses globally can eliminate manual errors, ensure global receipt capture across languages and currencies, and track VAT across markets.
Plus, integrating your expense management system with financial systems, such as an ERP like NetSuite, creates a seamless and accurate data flow. With an unparalleled set of automatic classifications, customizations, and export options to fit your accounting needs, you can automate the coding of expenses, mapping them to appropriate general ledger accounts for accurate reporting.
“Brex has been a tremendous time saver when it comes to reconciliation and expense management, especially since Brex’s direct integration with NetSuite allows us to manage all entity spend in one dashboard.”
— Ty Barton, Accounting Manager, Signifyd
Let expense management automation do the work for you.
By automating global expense management compliance, controllers can reduce the risk of errors, policy violations, and fraud, while improving efficiency and transparency in the expense management process.
AI-enabled expense automation amplifies human effort and gives the accounting team an army of AI analysts so they can skip the fact-finding and error resolution and go straight to better decision-making. This allows controllers to do more with less, expand their influence on the business, and grow their strategic authority across the organization.
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