How Long Should Expense Approval Take?

In many companies, one of the greatest sources of frustration is the expense approval process. For employees who need to pay out of pocket for work-related expenses, the time between submitting a claim and being reimbursed can feel like forever, and in some cases that’s not far from the reality. While the average business takes a little less than two weeks to complete the reimbursement process for each claim, others can take a month or longer. So what gives? What makes the process so arduous, and what can be done to fix it? 

Who is Affected by Long Expense Approval Times? 

The short answer is that a lengthy, inefficient expense approval process eventually takes its toll on everybody. Any employee who has used their own funds for work-related expenses will always be affected in some way, but long wait times are especially difficult for employees who don’t make enough money that they can afford waiting for reimbursement after they foot the bill for everything from gas or a work-related hotel stay.

On the other side of the process, a slow and inefficient expense approval process can also burden your finance and accounting teams, as they can get bogged down by too many reimbursement claims piling up in the approval process workflow. This also impedes their ability to perform other responsibilities of their jobs, effectively slowing down other workflows within your business, and seriously harming expense report compliance in your organization. 

So What’s Taking so Long?

What contributes to the dreaded too-long expense approval time? Any number of factors may be in play.

Submittal Errors

Oftentimes, reimbursement claims are slowed down by an awkward and time-consuming submission process. If employees aren’t trained properly on the process, or it’s confusing or unwieldy to navigate, this increases the chance of employees making errors or missing steps when submitting a claim. In turn, this creates confusion and pileups in the approval process as these mistakes are found and resolved, further slowing everything down. 

Manual Approval and Processing

The need for manual approval on expense reimbursement can also contribute to slow workflows. When a specific person or people have to manually go through and approve expense reports, that opens your company up to the ever-present threat of the simple mistakes and clerical errors that happen when a system necessitates information changing hands multiple times. 

Additionally, the need for a manager to be present and approve paperwork means that your workflow will suffer whenever the people in charge of approval aren’t available for whatever reason. If you over-rely on manual processing, your approval time will suffer when one or more members of management take a vacation or sick leave.

Bottlenecks

All of these things add up! And the reimbursement process consists of several stages: submission, review, verification and approval. With multiple steps introducing room for errors, pileups will happen. And not only are these pileups slow and annoying, but they can also be costly. 

Even when the expense reporting and approval process is functioning at its fastest, reimbursing an employee inefficient approvals can cost you an average of $58 dollars per expense report, according to a report from the Global Business Travel Association. However, according to the same report, nearly 20% of submitted expense reports contained errors that needed correction. Not only do those mistakes take an average of a whopping eighteen minutes to fix, they cost an extra $52 for your business to correct. Even if your business only processes 25 reports a week, that’s over $1,3000 dollars a week spent fixing mistakes. In time spent, that’s 390 hours – over two weeks’ worth of time! Don’t you have other things you’d rather spend that time doing? 

How Can You Speed Up the Process for Your Employees? 

Once you understand the factors that could be contributing to a lengthy expense approval process, the next step is to figure out how to nip those factors in the bud. Have you considered automation? By introducing automation to your reimbursement process, your business can move this traditionally analog process into the 21st century. When you introduce automation, you go from having your employees submit paper-based receipts manually to a digital system where your employees instead submit their expenses through an app. You’ll see improvements like: 

Mobile management

Since most of your employees’ expenses will be incurred outside the office, why not give your mobile workforce the technology and tools to start the reimbursement process from anywhere? By utilizing automation with an electronic approval system, whenever an employee pays for something out of pocket, they can simply and immediately bring up an app on their phone or tablet to report travel, submit receipts and receive notifications about their reimbursement claims. The mobilization of this process means that it can start much earlier, reducing both wait times and the chance for any errors to occur. Your employees also enjoy greater visibility of the entire process throughout. 

Streamlined Approval

As mentioned above, one of the factors that can make the reimbursement process so complicated and time-consuming is the multiple opportunities for employee mistakes that can bog everything down. Digitizing the expense approval process enormously reduces the number of mistakes employees will be able to make. An automated workflow also makes it much easier to catch mistakes when they do happen. You can also flag certain behaviors, so that you’ll be quick to notice if an employee submits a duplicate report or exceeds the daily per diem rate. 

Faster Payments

Automation doesn’t just streamline things for the employee needing travel expense reimbursement, though. With a digitized expense approval process, supervisors, managers, and anyone else in your business responsible for review and approval will receive automatic notifications when it’s their turn to participate in the approval process. Then, once approved, the request is automatically moved along to the next stage. All of these improvements to the workflow, besides helping your peace of mind and your employees’ satisfaction, are done in the service of faster, seamless reimbursement. 

Speed Up Your Expense Approval Process With CompanyMileage

It’s clear that automating the expense reimbursement process has the potential to benefit your business enormously. Employees will spend way less time documenting and submitting expense reports, with a smaller margin for error, and supervisors and managers will spend less time receiving, correcting and approving them. If you’re ready to receive these benefits, our expense reimbursement software, SureMileage (with its sister products, SureExpense and SureMobile) are ready to help you reduce the time and energy needed to complete your business’s expense approval process. 

Using our platform, employees can log trips, save receipts and submit reports from their mobile devices. Once submitted, those reports move quickly and easily through your customizable approval workflow; our system even integrates with all major accounting and payroll platforms. Ready to reduce the slog of expense approval and embrace efficiency? Request a free demo with CompanyMileage today!