5 steps to automate expense reporting and approvals

Expense requests and approvals seem like they should be straightforward, but finance teams know too well that they often aren’t. This is especially true if you rely on manual expense management processes, which are time-consuming, error-prone, and inefficient.

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The solution? Automation. By automating expense requests and approvals, you can simplify the entire process, eliminating the need for manual data entry and admin work. Plus, with the right expense management automation tool, you can get real-time visibility into your financial health.

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In this guide, we'll explain how to automate your expense reporting process quickly and easily. But first, let’s talk about why we still need expense reports, how expense management automation works, and the benefits of choosing an all-in-one expense management solution.

The problem with manual expense reporting

Expense reports are a hassle for everyone involved. Employees have to hold onto paper receipts, confirm credit card bills, and document their expenses. Managers need to review and approve expense reports, often for several employees. Accountants need to ensure the books line up.

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But even after all this work, it’s still impossible to know if everyone is consistently following your policies, especially your internal controls around spend management. Most organizations still rely on expense data that are manually entered, which exposes them to errors, duplication, and expense fraud.

Why we still need expense reports

If your company uses corporate cards, employees should rarely have to make business purchases with their own money. Theoretically, this should eliminate the whole need for expense reports.

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But some employees may not have access to a business credit card, or they may forget or misplace their card on a business trip. Maybe some vendors don’t accept the card network your business uses.

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These situations will always pop up despite your best efforts to prevent them. When they inevitably do, a simple and efficient process powered by automation is better for everyone involved. It’s less work on the admin side, and employees get reimbursed much faster.

What is expense management automation?

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With expense management automation, employees can easily submit their expenses via user-friendly software that automatically processes and tracks their expenses. These tools improve efficiency, accuracy, and transparency in expense management, saving time and reducing the risk of human error.

Typical automated expense reporting workflow

Expense management automation eliminates the most time-consuming aspects of filing and processing expense reports. Instead of submitting paper reports or Excel spreadsheets, your employees can generate and file reports automatically in your expense management software.

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Depending on the tool you choose and how you set it up, a typical automated workflow might look like this:

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1. The employee incurs an out-of-pocket expense
2. 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. A mobile app is especially handy for this.
3. The tool analyzes the receipt, ensures it matches the expense, verifies the charge is within policy, and automatically categorizes the expense
4. The employee verifies the expense details, adds it to a report, and submits it to their manager
5. Their manager gets notified and either approves or rejects the report
6. If the report is approved, it gets sent to the finance team, who can either approve it for processing immediately or wait to do approvals in bulk
7. Once the report is processed, the expenses are logged in the company’s accounting software, and the employee expense reimbursement is sent

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That’s it—no paper reports or receipts to file away, no time spent manually verifying expenses, and 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

Start by researching and selecting expense management software that aligns with your business needs. 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, you’ll want to configure your expense policies within the software, setting up rules for spending limits, expense categories, and required documentation. It’s important to ensure the system can automatically enforce your policies by flagging non-compliant transactions or, better yet, blocking them before they go 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 that come through. Ramp’s expense management software does exactly that, consolidating all of your expense data in one place.

4. Implement approval workflows

The next step is to set up automated approval 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 will allow you to transfer data seamlessly between the two systems to reduce manual errors and save time.

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Benefits of automated expense tracking

Fewer errors

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.

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With automated expense management software, there’s no manual inputting of expenses. This dramatically reduces the likelihood of an error occurring, achieving significant cost savings and ensuring compliance with company policy. 

Happier employees

Submitting expense requests and waiting for approval is an annoyance for both sides. But it can be particularly frustrating for an employee who’s stuck waiting to see if they’ll get reimbursed for things like travel expenses, which can sometimes be large.

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With automated expense reporting, employees can be confident they’ll receive their travel expense reimbursement quickly, and it takes the onus off of accounting teams to rush to approve time-sensitive expense reimbursements, too.

Increased 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 habits

Real-time spend 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 understanding of your company’s spend habits, your team can better manage cash flow and make informed financial decisions based on your actual and projected budgets. ‍

Faster expense requests and approvals

With expense automation, requests are sent 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.

Automate your expense management reporting with Ramp

Expense reports are a necessary part of doing business, but they don’t need to be so time-consuming. Automation is the key to solving your expense management challenges.

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Ramp’s expense management and reporting software can increase your productivity instantly. 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.

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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.