Expense management seems mundane but is full of innovation
The decade from 2010 to 2019 brought significant change to just about every industry as new and innovative technology altered the way businesses operate. One sector of business arguably among the most affected was expense management, an often tedious and mundane — yet necessary — aspect of running a business.
It may be somewhat surprising that at the dawn of the decade in 2010, physical paper remained significant in the expense management process for many organizations, as did database software such as Excel. As the decade progressed, however, expense management began to move online in an effort to make the process simpler and more transparent. Multiple vendors and platforms have tried to solve the expense management problem in recent years, but those efforts have generally fallen short.
During the same timeframe, attitudes among workers across the country evolved. As we launch into a new decade, today’s new workforce wants, expects and demands easy-to-use apps in the vein of what they’re used to in their day-to-day lives. Today we can book flights, order pizzas or request rides with just a few simple taps on our smartphones, and today’s professionals increasingly demand that level of ease and convenience when it comes to the applications they use at work every day.
In the expense management space, there are several reasons reasons why this revolution is starting to gain momentum.
Organizations are placing greater importance on the employee experience. Over the years, the process of tracking and reporting expenses has become known as a tedious and annoying task that causes dread among employees at the end of each month. The root cause of failure of most expense management systems is that employees don't use it. And when employees don't use it, finance teams have to work harder to close books at the end of every month.
Chasing down receipts to accurately report expenses and then going back-and-forth with managers to confirm can be a time-consuming process that takes employees out of the flow of their day-to-day responsibilities. It hampers productivity, increases frustration levels and encroaches on employees’ personal time. So why not make this process something that can actually enhance the employee experience rather than detract from it?
For most organizations and their employees, the problem is expense management is restricted to one native app even though expense receipts typically reside across multiple apps. The key to addressing this is integrating modern expense management capabilities within the tools and apps that today’s employees use every day, such as Gmail or Outlook inbox, Chrome, Slack or WhatsApp. The idea is to create an “app-less” experience that lives where workers already are rather than adding to their already long list of tools. If, for example, an employee receives an email receipt for a work-related flight, they should be able to capture and report that expense instantly with a single click. This makes expense reporting second nature, helps employees appreciate their employer, and boosts morale among teams because they no longer have to struggle through the antiquated expense process of yesteryear.
Businesses are increasingly automating tedious back-office tasks. Artificial intelligence and machine learning have made inroads in automating common business functions that are traditionally time-consuming, prone to human error and costly when processed manually. When it comes to expense management, automation is helping on two fronts.
First, businesses are now able to automate the approval process based on preset corporate policies. For example, an organization might have a policy that allows only employees with titles of VP or above to book business class flights when traveling for work. With this in place, modern expense management can detect if a non-VP attempts to book a business class flight and deny the request instantly, even before it is submitted for approval. This essentially eliminates the risk of fraudulent expense claims and gets rid of back-and-forth interactions between employees and managers, significantly speeding up the entire process.
In addition, thanks to expense management embedded in employees' daily lives, expense reporting happens in real-time. This means all the information is stored in a central location that can be exported in an accounting-friendly manner, allowing finance teams to ensure their organization is always compliant and audit-ready and helping them close books faster.