5 steps to automate expense reporting and approvals
- What is expense management automation?
- Understanding the expense report automation workflow
- How to automate your expense management system in 5 steps
- Benefits of automated expense tracking
- How AI helps expense automation
- Let Ramp be your automated expense management solution
The most recent studies have found that an average employee expense report costs $58 and takes 20 minutes to process—per report. For companies handling hundreds monthly, that’s time and money lost.
If you rely on manual expense management processes, it can be time-consuming, potentially error-prone, and inefficient. Every finance team knows that expense requests and approvals should be straightforward, but that’s not always the case.
The answer to this problem is automation. You can simplify the entire process, eliminating the need for manual data entry and admin work. Plus, with the right automated expense management solution, you get real-time visibility into your financial health.
In this article, we explain automated expense reporting, how to automate your expense reporting process quickly and easily, and the benefits of choosing an all-in-one expense management solution.
What is expense management automation?
Automated expense tracking allows employees to easily submit their expenses via user-friendly software that automatically processes and tracks them. These tools improve efficiency, accuracy, and transparency in expense management, saving time and reducing the risk of human error and expense fraud.
How does expense management automation work?
Automated expense reporting tools generally include a suite of features like:
- Digital receipt scanning
- Automated Expense Reports
- Automatic expense policy compliance
- Built-in approval workflows
- Data, Insights, analytics, reporting
- ERP Integrations
- Expense reconciliation and reimbursement
- Digital recordkeeping to eliminate literal paper trails
Why is automated expense reporting important?
Using the automated expense management solution will help your business save money and forecast more accurate budgets in the future. These tools can also:
- Reduce manual tasks and workflows
- Improve accuracy and efficiency
- Ensure policy compliance
- Streamline processes for a better employee experience
- Adopt a proactive approach to your finances
- Scale and grow your business
- Keep detailed records for tax season and future audits
Understanding the expense report automation workflow
AI expense management eliminates the most time-consuming aspects of filing and processing expense reports through a manual process. Instead of submitting paper reports or Excel spreadsheets, your employees can generate and file reports automatically in your expense management software.
Depending on the tool you choose and how you set it up, a typical expense report automation workflow might look like this:
- The employee incurs an out-of-pocket expense
- They log the expense in the automation tool by importing their invoice or e-receipt or by taking a photo of their receipt and uploading it, preferably via a mobile app
- The tool analyzes the receipt, ensures it matches the expense, verifies the charge is within policy, and automatically categorizes the expense
- The employee verifies the expense details, adds it to a report, and submits it to their manager
- Their manager either approves or rejects the report
- If the report’s approved, it gets sent to the finance team, who can either approve it for processing immediately or wait to do approvals in bulk
- Once the report is processed, the expenses are logged in the company’s accounting software, and the employee expense reimbursement is sent
The process completely eliminates the need for paper reports or receipts to file away. You won’t need to spend time manually verifying expenses, and there’s no need to agonize over expense categories. The expense reporting automation ensures all expenses are accurate and within policy.
How to automate your expense management system in 5 steps
1. Choose the right expense management software
Research and select expense management software that aligns with your business goals. Look for platforms that offer robust automation features, user-friendly interfaces (for both web and mobile), and integration capabilities with other financial systems and accounting software you already use.
2. Upload your expense policy
Next, configure your expense policies within the software, setting up rules for spending limits, expense categories, and required documentation. Make sure to choose a system that automatically enforces your policies by flagging non-compliant transactions or, better yet, blocking them from going through.
3. Integrate corporate cards
If you use business expense cards, it’s helpful to have an expense automation system that integrates them automatically, capturing and categorizing any transactions. Ramp’s expense management software does that, consolidating all your expense data in one place.
4. Implement approval workflows
Set up automated workflows to streamline the review and approval process. Designate approvers, set up multilevel approvals if necessary, and define the routing rules to ensure each expense claim follows the proper channels.
5. Sync with accounting systems
Lastly, integrate your expense management software with your accounting software to automate the reconciliation process. This allows you to transfer data seamlessly between the two systems to reduce manual errors and save time.
Benefits of automated expense tracking
Managing your expenses accurately and efficiently in today’s economic client is crucial for keeping maximizing your cash flow and controlling your spending. By automating your expense tracking, you’ll be streamlining efforts. These are a few of the benefits you can expect to see in your business:
More control over the expense system
According to the Global Business Travel Association, 19% of all expense reports contain errors. This creates a ton of hidden costs since the error must be corrected manually, which eats into the finance team’s time.
Automated expense management software means you never have to manually input your expenses, and they always automatically comply with your company policies. This dramatically reduces the likelihood of errors, duplicates, or policy violations, achieving significant cost savings and ensuring compliance with company policy.
More engaged employees
Submitting expense requests and waiting for approval is an annoyance for both sides. But it can be particularly frustrating for an employee stuck waiting to see if they’ll get reimbursed for things like travel expenses, which can sometimes be large.
With expense reimbursement software, employees can be confident they’ll receive their travel expense reimbursement quickly. It also takes the onus off of accounting teams to rush to approve time-sensitive expense reimbursements, too.
Boost in efficiency & productivity
When you have an easy-to-use automated expense management system, no one's time is wasted. Instead of spending time manually logging and processing expenses, your employees can focus on business that actually requires their expertise. Automated expense management has been particularly transformational for accounts payable departments at small businesses.
Better visibility into spending insights
Real-time spend management tracking allows you to take a bird’s eye view of your entire organization’s spend or zoom in on a single team or employee. With a deep, data-driven understanding of your company’s spending habits, your team can better manage cash flow and your budgets. You’ll suddenly feel more empowered to make informed financial decisions, driving your business goals forward.
Faster expense requests and approvals
Expense automation sends requests instantly, and managers can approve them with a click. There’s far less time wasted waiting around for a response, and there’s no paperwork, no spreadsheets, and no duplication.
Seamless integrations
Inputting the same data into multiple finance or accounting tools doesn't save you time. An expense report automation tool will integrate with your other accounting, credit card, or HR platforms, providing consistency and simplicity across reporting and audits.
How AI helps expense automation
Artificial intelligence, or AI, has been in the news lately, and for good reason. It’s what powers expense automation tools. AI will learn about your expense management needs and set up workflows and approvals based on your own policies.
It can add reminders so you don’t hold up the approval process. It also streamlines the entire enterprise, so you no longer have to work in manual spreadsheets with paper receipts. And as AI learns more about you and your needs, it will only become better at supporting them over time.
Let Ramp be your automated expense management solution
Expense reports are a necessary part of doing business, but they don’t need to be so time-consuming. Automation software is the key to solving your expense management challenges.
Ramp’s expense management and reporting software can instantly increase your productivity. Our modern finance platform features corporate cards, automated expense requests and approvals, spend controls, and a handy mobile app for capturing receipts on the go.
No more chasing down paper receipts. No more annoyed employees waiting on reimbursements. No more overburdened accounting teams. Learn why companies who choose Ramp save an average of 5% a year.
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