Travel and entertainment (T&E) expenses are the biggest expense area in your company behind payroll, but many companies are not giving it the attention it needs. As a result, these companies are only failing themselves, allowing T&E expenses to soar unchecked and making it an easy target for employees defrauding the company. An automated employee tracking system offers a convenient fix to a common problem.
The Trouble With Audits
Good expense management is an important business process, but many companies aren’t doing so for a number of reasons. Whether they believe it unnecessary or too difficult to be worth it, less than two-thirds of companies regularly audit expense reports according to the Aberdeen Group.
If you have an inadequate expense management process or none at all, this can cost you in several areas. Other than the obvious – permitting your employees to overspend on T&E expenses without consequences – you could also face the ramifications of noncompliance. There are a host of laws that can affect your company if it is public, and the IRS has strict rules regarding travel expenses. To abide by the IRS Accountable Plan, you must maintain accurate records of expense reports and reimbursements. Otherwise, all reimbursements will be taxed as wages.
If you are performing audits, you’re likely doing so manually. This method of auditing comes with its own problems. Chief among them is the time needed to do it properly. Most time and energy is typically spent trying to verify employee expenses, and due to how long this can take, many supervisors and managers pressed for time simply give reports a cursory review. Most companies will only audit a sampling of expense reports, as well. Less than 15% of reports submitted by employees are ever audited.
It’s also necessary to keep the proper documentation for the expense reimbursement process in order to prove an audit trail. This is especially difficult with a manual approach. This documentation is not managed consistently across a company when each supervisor and each department is following their own procedures. Even when you try to implement unified rules and procedures companywide, you are still relying on each person behaving the same way and always taking the time to maintain the correct paperwork. This makes auditing after the fact incredibly difficult.
When your company fails to maintain a state of audit readiness, it leads to higher T&E costs, increased instances of fraud schemes and slower turnaround time for reimbursements. An automated employment tracking system addresses several of the issues associated with traditional audit methods and helps you become audit ready.
Master Travel Expense Audits
An employee tracking system designed to handle travel and expense activities will introduce your audit processes to an automated, cloud-based solution. By bringing technology into the equation, you’ll have several advantages.
Full Audit Trails
When an audit comes around, whether it be internal or external, you need to have the paperwork ready to prove a history of due-diligence and compliance. Over time, reports can become lost or disorganized, impeding the ability of an audit to catch fraud or errors. You won’t have the full picture when it comes to your T&E expenses. With the aid of technology, your company can conduct the entire reimbursement process through a secure system that keeps everything organized and accounted for. This will give you significantly more insight during your next audit.
Consistent, Reliable Processes
An automated employee tracking system can implemented company wide to track expenses of any department. By having your employees united by one system that manages their T&E expenses, every step of the reimbursement process will be standardized, and follow-through will be guaranteed. The need to make copies of reports to sign off on before sending them up the chain of command will be obsolete. With all activities monitored on a web-based system, submittals, approvals, and issuances of reimbursements will all happen in a regulated, timely manner.
Approvers in the reimbursement process are able to see data related to trips and expenses as soon as they are submitted. Information on trips, mileage and other T&E expenses are instantly available wherever you are via a cloud-based database. With an employee tracking system, you can even monitor your employees for specific behaviors such as when they submit duplicate expense reports for reimbursement or report excess mileage. This real-time monitoring of every expense report submitted will prevent employees of booking trips or making purchases outside of T&E policy and keep your costs down.
Be Prepared with CompanyMileage
With CompanyMileage, you’ll never need to return to the old ways of conducting audits. SureMileage – and its sister products, SureMobile and SureExpense – move all processes to a web-based solution. Employees can easily submit expense reports for approval, and administrators have total visibility throughout the entire process.
Our unique system calculates point-to-point trip distance, ensuring employees report accurate mileage every time. Instances of mileage padding and unauthorized expenses will be eliminated. The days of relying on manual auditing approaches are over, and with an automated employee tracking system such as CompanyMileage, auditing reports can now be much faster, dependable and consistent. Achieve full accountability for your employees, better manage T&E spend and be prepared for your next full-scale audit. Request a demo with us now to learn more about our expense reimbursement solutions.