What is Expense Management? How HR Software Simplifies the Process
Today’s business environment has changed dramatically. Managing Employee expenses efficiently is no longer an option—it’s a necessity. As Companies expand, so do their Travel Claims, Reimbursements and Compliance requirements. Expense Management is a key component of expense management. When combined with the use of Modern HR Software, Expense Management will change the way we manage our employees’ Expenses.
Expense Management is defined as the process of collecting, approving, reimbursing and auditing all Employee Expenses incurred while conducting business activities. Types of Employee Expense include:
A successful Expense Management Software allows organizations to properly and efficiently track all Expenses incurred, provide timely and accurate approval of Expenses, reimburse Employees quickly, and maintain compliance to Company Policies and Statutory Requirements.
The Major Challenges of Traditional Expense Management:
Many Organizations continue to rely on the use of Paper Receipts, Spreadsheets and Emails to Manage their Employee Expenses. The use of these methods creates numerous challenges for organizations, including:
- Manually entering data leads to Data Entry errors
- Lost or incomplete receipts
- Time lapses before Expenses can be Approved/Reimbursed
- Possibility of violating Company Policy or presenting a Compliance Risk
- Increased Workload (and related burden) for HR Department and Finance Team
Inefficient systems not only reduce the organization’s level of Productivity, but they can also negatively impact Employee Satisfaction and the Financial Control of the Organization.
Read more: How Human Resource Payroll Software Can Transform Your Business Management
How Expense Management is Made Easy Using HR Software
Expense management is made simple by integrating it into a single online platform known as an all-in-one HR platform. With HR software, everything related to an employee’s expenses can now be done electronically and with greater speed, accuracy, and transparency than ever before.
Expense Tracking Made Easy
The HR software allows employees to easily and securely submit their expense reports. The convenience of having all expense information in one location makes it easier for the HR department and finance department to view and manage employee expenses.
The Convenience of Digital Submission
Employees no longer must physically submit paper copies of invoices, receipts, or bills as HR software allows for the simple upload of all these documents with the click of a mouse or the press of a button on a mobile device. This has diminished the risk of missing expense reports because they no longer must be mailed or delivered in person.
Automatic Approvals
The HR software has automated the process for routing expense approvals by having expenditure routed to the appropriate manager immediately based upon preset conditions. Therefore, the HR software reduces the time that managers have to spend waiting for their approvals after an employee submits an expense report and tracks every step of the expense approval process for accountability.
Policy Compliance with Controls
Expense policies can be set up through the HCM application to flag expense claims automatically when they are not compliant or exceed established limits. This automation eliminates the need for manual review of each expense claim for compliance reasons.
Quick and Accurate Payment of Expenses
After an expense claim has been approved, there is no further delay from the time the expense data is entered until it reaches payroll/finance; therefore, the employee will receive a timely reimbursement, and the organization will have accurate payroll/finance records.
Access to Current Reports and Insight
The HCM application provides access to detailed reports by spending patterns and department, as well as reports that show the budget usage for that department. This information may help the organization to manage costs, along with making decisions based on factual data.
Integration between Expense Management and Payroll/Finance
Integrating expense management into the payroll/finance process will reduce Data Silos and minimize data reconciliation errors; therefore, HR and finance departments can save time and resources on the data entry process.
Read more: A Beginner’s Guide for Small and Large Businesses companies on How to Choose the Best Human resource Payroll Software
Organizations can benefit from efficient HR Software to manage expenses.
1) Reduced Admin Workload
2) Better Control and Visibility of Expenses
3) Faster Reimbursement Process
4) Increased Compliance with Audit Readiness
5) Enhanced Employee Experience
For organizations that are growing, having benefits like these equates to greater operational efficiencies and improved Financial Governance.
Expense Management – An Essential Function of HR
Expense management is not strictly financed anymore. Expense management is now an integral part of the HR function; it ties directly to overall employee satisfaction and efficiency in the workplace. Today, remote workers, frequent travel, and constantly changing business requirements make manual expense processes antiquated.
Using proper HR Software provides organizations with a comprehensive solution for effective expense management. It allows organizations to manage their expenses in a transparent, compliant, and timely manner from one platform.
The right HR Software makes expense management easy and stress-free. HR Teams can focus more on strategic initiatives and less on clerical tasks by automating the expense submission process, approval, and reimbursement process. Organizations that want to improve efficiency, reduce expense-related errors and enhance employees’ experiences should strongly consider implementing a robust HR Software solution.