Pursuit of Innovation: How 3 Disruptive Technologies Are Simplifying Expense Management

According to a global CFO study conducted by WNS in 2022, 70% of organisations are geared towards investing in technology for future-proof finance & accounting functions, making it a golden opportunity for companies working to disrupt expense management. Along with travel, expenses form the 2nd largest part of the total operational expenses of companies, making cost-saving in these aspects a significant move for organizations.

We can look at the latest Disruptive Technologies under expense management as a part of 3 stages of expense capture. 

Stage 1: Intelligent Data Capture

Manual capture of expense data has multiple drawbacks. It is highly time-consuming for employees, often leading to frustration and low morale, especially for those at a higher level of the organization. Secondly, it is often difficult to detect accidental mistakes or fraud, and these usually end up costing the company a lot of money on a yearly basis.

Enterprises should look into adopting expense management systems that come with automated expense capture. Invoices, both physical and electronic, can be scanned and the relevant data can be captured accurately so that the employee just has to submit it as a part of an expense report. A mobile app that integrates with the platform seamlessly can go a long way in helping employees capture and file expenses on the go.

Email and SMS integrations can effectively extract the relevant information from electronic invoices to reduce the expense management tasks for the employees, and reduce the risks of fraud for the company.

Stage 2: Automated Workflows and Expense Reporting

"If the system knows who reports to whom, why can't it just send the expense report directly to them?"

It's a great question, and one that technology has already solved. Integrating your expense management system with the HRMS and the ERP used in the organization can go a long way in automating workflows and approvals.

Automating expense reporting & approval also significantly speeds up and simplifies reconciliation, thus saving countless hours for the finance team. Here's an example:

Dev Patel, a sales associate, has to attend a meeting in Ahmedabad. He submits a detailed travel request to his direct manager, who goes on a leave before approving the request. Dev reaches out to the finance team for a direct approval, but in the absence of an approval from his manager, the team turns him down.

In the absence of an automated workflow, Dev's travel request would not get approved on time, and the company would lose out on bagging a potential client.

In the presence of a smart approval workflow integrated with the HRMS, the system detects that the manager has not approved the request within 24 hours. Thus, the request can go directly to the finance team which can make the decision on the basis of Dev's seniority and any preset conditions set under the expense policy of the company.

This is how Dev manages to get the expense approval in time under non-ideal conditions, which are aplenty in any organisation.

Stage 3: Accurate Visibility For Real-time Calibration

Have you ever sat with your personal expense summary at the end of a month, realising you spent too much money on food or movies? You are bound to have switched to home-made food or movie nights at home in the following month.

Now, imagine this on a very large scale, with multiple rules and policies set in place, and multiple people making the expenses. That's why corporate spending needs eagle-eye tracking and visibility.

Optimising employee expense budget starts with getting granular visibility on where the employees are spending the company's money, how much are they spending for various reasons in different states, and if there has been an unexpected hike in any specific categories of expenses. Having this understanding helps CFOs and other CXOs make large-scale decisions regarding operations and policies, and this, in turn, has a huge impact on the profitability of the company.

An important thing to remember while picking smart expense management solutions is that organizations of all sizes can benefit from the right technology. For smaller companies, it means better utilization of the limited manpower and budget. For larger companies, it means getting a bird's eye view of the employee expense budget.

Afterall, if history has taught us anything, resisting technology is a sure-shot way to lose the edge in any competitive market

Author: 

Ramesh Iyer, President & CRO, Happay