The Global Business Travel Association reported that it takes around twenty minutes to process a single expense report. That’s if there are no mistakes. With almost one out of five requiring correction, adding eighteen minutes to the process, businesses will spend nearly forty payroll hours for every 100 expense reports they process. With the average hourly wage in 2020 being $29.81, processing 100 expense reports a month will cost companies over $10,000 a year. This cost can grow exponentially if your expense reimbursement process flow is complicated and inefficient.
An inefficient and confusing reimbursement process isn’t just costly for business, but can also be a financial burden on the employees waiting on payment. However, with expense fraud costing organizations $1.9 billion annually, reimbursement policies have to straddle the line between being too relaxed, resulting in wasteful spending, or too restrictive, resulting in unhappy employees.
Finding a process flow that works for both the company and employees will save money and reduce stress.
Create a Map of Your Expense Process Flow
Knowing the current expense procedures and processes your company has put in place is the first step in improving them. This isn’t always easy. How do employees report expenses? How are they reviewed and who approves them? Once approved, how does payment work? With approvals sometimes requiring over a dozen steps and multiple employees working on it from start to finish, figuring out your current process flow can be a formidable task to tackle.
Start with an expense and track it throughout the expense reimbursement process flow. Doing this will give you a clear view of the issues that crop up at each stage, and let you make a map of your process. Using this, you can identify areas of opportunity.
While mapping out your process, look at each stage and ask yourself these three questions:
- When is manual review and approval required?
- Who is responsible for review and approval?
- What are my contingencies if the approvers aren’t available?
With a map of your process, you can find the bottlenecks that slow it down.
Identify an Owner for Each Step of the Expense Reimbursement Process Flow
There are always going to be expenses that will require manual review. When creating your reimbursement process flow, identify who owns each stage and their responsibilities. Every company will be different but, for most, the expense flow will include the requester (the employee submitting the request), their manager, human resources, and accounting. Knowing who owns which stage will let you monitor where speedbumps are and adjust the process to better fit your business needs.
Build In Contingencies to Prevent Roadblocks
Delays in reimbursing expenses can have real and severe effects on employees. A 2019 report released by Conferma showed that the time it takes to repay the money they’ve spent caused 45% of the employees surveyed to experience cash flow issues at some point during their employment. Often these delays are because of something as simple as an approver being unavailable or unresponsive.
One of the benefits of mapping out your expense reimbursement process flow is having a birds-eye view of the entire process. Once you have identified the approvers, set up alternate reviewers for when they aren’t available, this prevents one person from holding up the process.
Automate the Review Process When Possible
There is an easy-to-understand temptation to review every expense to ensure you aren’t wasting money. After all, the cost of doing business is high, and paying for unnecessary costs adds up. However, doing this can be costing your organization more than it saves while also delaying your employees from being repaid.
Using the map of your expense reimbursement process flow, identify what expenses can be automated. There are many reasons why you may choose to automate approval for expenses, such as:
- Less than Review Threshold — Setting a minimum amount that an expense has to be over before requiring manual review will save money.
- Expense to Recurring Vendor — If you work with a vendor consistently, you may not need to audit every payment to them.
- Expenses from Specific People, Projects, or Departments — For various reasons, some groups’ expenses may not require review.
Automating approval for the expense can reduce the amount of work required from approvers and ensure employees get paid promptly.
Allow for Detours When Needed
Improving your expense reimbursement process flow doesn’t end when you put it into action. It is critical to monitor the results. Pay attention to what expense requests take the longest or which stages aren’t necessary. Redundancies are vital to have but if they are hindering the process flow, they may do more harm than good.
Use the information you learn from monitoring the changes to tweak the process flow. As your business needs change and technology improves, so should your processes. Having flexibility will allow you to make changes to ensure that the approval process continues to save, instead of cost, your company money.
Let CompanyMileage Help Make It Simple
Having a well-made and easy-to-read map is an invaluable resource for navigating unfamiliar territory, but having someone help guide the way will make reaching the destination easier. The same goes for your expense reimbursement process flow. CompanyMileage is here to lead the way and show you the shortcuts that aren’t on the map. With an entire suite of tools, including SureMileage, SureExpense and our mobile app, SureMobile, CompanyMileage gives you the power to automate your expense reporting from the first step to the last.
Our software approaches expense management, especially for employee trip expenses, in a novel way. Rather than reimbursing for mileage based on odometer readings, we calculate the shortest route between the beginning and end of every trip. It only takes employees a few minutes each day to create and submit expense reports for review and approval.
With customizable workflows, every step of the approval process is automated. Our system keeps the process flowing by pushing expense reports through each phase of the workflow, notifying approvers, and allowing you to set up secondary approvers. Thanks to our ability to integrate with your payroll software, once the expense is approved and payment is ready, completing the payment will be quick and simple. Additional features such as the ability to flag certain behaviors in the system and set per diem rates ensure the process stays on track.
Ready to streamline your reimbursement process and save yourself some money along the way? Request a demo with CompanyMileage today.