It’s Time to Automate Your Expense Approval Workflow

Expense management is a fact of life for any business. The procedures that make up the process are crucial to monitoring and optimizing spending, and at their core, you’ll find the approval process. The expense approval workflow is the process by which employees submit expenses they have incurred for reimbursement. If this workflow is not fine-tuned, numerous problems such as out-of-policy or fraudulent spending can cripple your expense management efforts. 

Despite the importance of orchestrating a smooth, organized expense approval workflow, many companies still rely on outdated, manual processes to get the job done. To ensure that your spending doesn’t exceed its means, it’s time to automate these procedures and shore up vulnerabilities that allowed overspending in the past. 

The Shortfalls of a Manual Workflow

If you’ve been manually managing expense approvals — using emails, spreadsheets and paper invoices and receipts — then you’re well aware of how much time is dedicated to the process and how easily it is to make errors. Even though this should be a workflow everyone is familiar with, the average expense claim takes 20 minutes to process; that’s 5 minutes for the employee to file, 5 minutes for their manager to review and approve and 10 minutes for a finance team member to review, reimburse and reconcile. 

Now, multiply 20 minutes by the hundreds of expense reimbursement requests processed each month, and you understand why people might start making careless mistakes such as filing expense reports incorrectly (which happens about 20% of the time). And, when that happens, it takes another 18 minutes on average to correct the mistake. 

Considering the excessive time commitment of manual expense reporting and approval, it’s not surprising that the process itself represents a large expense for companies. Not only must companies pay for the manpower required to facilitate approvals, you also need to factor in costs such as resources (physical documents, storage space, etc). There are dollar amounts floating around the internet illustrating the cost of processing expense reports, ranging from $20.65 all the way up to $58.00, but the actual cost is likely somewhere in the middle. The point is: sticking with manual processes is neither cheap nor beneficial. 

The Benefits of Expense Approval Workflow Automation

Automating your expense approval workflow will alleviate the pain points detailed above. Not only will you save time by streamlining approvals — something everyone will undoubtedly appreciate — automation also puts data about the process at your fingertips. When you know something as simple as how much money has already been spent in the period, you can make more informed decisions regarding which expenses are pre-approved and which claims are processed. 

To speed up the process, some companies opt to eliminate extra review and approval stages by managers or supervisors, removing an extra layer of accountability and increasing the likelihood of out-of-policy expenses slipping through the cracks. When you automate these steps, it’s much easier to incorporate multiple layers of approval without worrying about creating a bottleneck. 

Moreover, automation allows you to create rules that determine whether an expense claim is automatically approved or denied. For example, if an employee submits a claim incorrectly — say in the wrong category or with the wrong documentation — it will automatically be returned to them with a note asking them to alter their request or provide additional documentation. Likewise, if a claim exceeds the per diem amount, the expense request can be automatically routed to a higher level manager for approval before being routed to the finance department for processing.

Building a Successful Automated Workflow

What are the ingredients of a successful workflow that embraces automation? First, you want it to be easy to set up and use. If the system only makes sense to CPAs or software developers, employees will be more likely to forgo submitting expense reports altogether rather than putting up with the hassle of a confusing process. This can cause a whole host of problems for companies including unhappy employees, financial inconsistencies and potentially violating the FLSA kickback rule. 

Next, your expense approval process needs to be scalable. If the workflow you conceive were to only work for your company when it’s small, it will only cause problems as you grow. Luckily, one of the great benefits of automation is that in nearly all cases, it allows for near infinite scalability.

Third, make sure the other platforms your company uses are compatible with the automated expense workflow you set up. Of the most important is obviously the accounting or payroll software your finance team uses. If you have to leap-frog from one platform to another at any point during processing, then that’s exactly the point at which reimbursement claims will get stuck. 

Lastly, you’ll want the system you implement to be flexible. Off-the-shelf software is designed to fit a wide range of customers, but each company is unique in their policies, procedures and structure. If there isn’t flexibility in workflow configuration built into the platform, you’ll have trouble successfully adopting it and reaping the many benefits of automation. 

CompanyMileage Has it All

Our suite of expense reimbursement tools, SureMileage, SureExpense and our mobile app, SureMobile, automate expense reporting procedures from start to finish. To address the need for better travel expense tracking, SureMobile allows employees to log trips right from their smartphones. Our novel approach calculates the fastest route between the beginning and end points of each trip, eliminating instances of overreporting. At the end of each day, employees only need a few minutes to organize trip information, save receipts and submit expense reports for review. 

Our system automatically pushes each expense report to the next phase of the workflow for review and approval. The workflow itself can be configured to your specifications, and we even integrate with your payroll or accounting software, so approved requests will always be paid out in a timely manner. 

Automating your expense approval workflow, when done properly, will save you time, money and resources. In fact, hundreds of CompanyMileage customers have saved 20-30% on expense reimbursement costs. One way we make this happen is by offering month-to-month contracts. By only paying for the number of employees using it, you can scale up or down depending on your needs. 

To learn more about automating your expense approval workflow, request a demo with CompanyMileage today.