Expense requests and approvals seem like they should be fairly straightforward processes, right? The fact of the matter is that they’re anything but simple. This is particularly true if you rely on manual processes, which have a ton of back and forth and cause headaches for everyone involved.
So then, what’s the solution to this problem? Automation. By automating expense requests and approvals, you can say goodbye to manual data entry, boost your bottom line, reduce admin work, and optimize the entire process from beginning to end.
So, how do you do that? This guide will show you.
Expense reports are a hassle for everyone involved in the process. Employees have to hold onto 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 that the books line up. Even after you do all of this work, it’s still impossible to know if everyone is consistently adhering to your policies, especially your internal controls around overspending.
According to Forrester, almost 80% of organizations still rely on expense data that is manually entered, which exposes them to errors, duplication and fraud. Automating expenses allows your business to create processes that are more time efficient for everyone involved, which saves your business hundreds of hours and tens of thousands of dollars.
Before you can dive into the fine details of automation, let’s review the typical manual expense management process.
The employee (who’s seeking reimbursement) must collect the various paper receipts, bills, and credit card statements needed to demonstrate proof of purchase. Once completed, they must make an initial request to their manager to approve a purchase in the first place.
The employee must fill out an expense report to clearly detail each expense, along with memos and receipts attached. Some companies ask employees to submit expense reports on a weekly basis, or for individual business trips or one-off events.
The employee’s direct manager must then find the time to thoroughly review the expenses and confirm that they’re permitted. If the manager rejects a certain expense item or notices a problem, they must notify the employee of the issue and send the report back for corrections—which tends to involve an awkward conversation. In some cases, the qualified expense claims will be approved and forwarded to the finance team..
After the expense report has been approved, the finance team will need to ensure the employee receives reimbursement. This reimbursement payment can also take several days to process.
Once the employee expense request, approval, and reimbursement is completed, the expenses need to be logged for accounting and expense auditing purposes.
The first step towards automation is to conduct a self-review during which you can clearly understand your current set of processes and workflows, then identify low-hanging fruit to tackle.
Once this has been accomplished, you can turn to an automated spend management platform to streamline the entire business expense report process. From the request stage to final approval, there are a variety of features that simplify the process and alleviate significant pain points.
Automation can transform a painful process into one that takes everyone just a few clicks to complete. Ramp customers leverage our expense management tools to automatically collect and match employee receipts—and then generate expense reports for you.
Employees can submit receipts using the Ramp mobile app by snapping a single photo and adding a memo. We also have a wide variety of integrations with apps including Gmail, Lyft, Outlook, and Uber, which makes the receipt collection process completely hands-free.
Spend management platforms enable you to set and enforce spending limits automatically. This ensures accountability at every step of the process with a clear approval trail for every expense.
As you can see in the screenshot below, Ramp administrators can set up conditional thresholds for requiring receipts, memos, accounting fields, and more. This is essential for any accounts payable team looking to eliminate overspending, especially in any unapproved categories.
Additionally, Ramp auto-notifies employees if their spend is out-of-policy. Instead of chasing after receipts and checking them against your policies, this level of automation keeps things such as your per diems and subscriptions in check with vendor and category restrictions at the point of sale.
Managers can leverage automated expense management tools to reconcile transactions, manage their teams, and view their spending as it happens.
Ramp’s expense management platform gives you full visibility into every expense across cards, reimbursements, and payments. Ramp also watches out for duplicate subscriptions, spend increases, unused rewards, and more.
Ramp watches out for duplicate subscriptions, spend increases, unused rewards, and more.
There are a number of reasons it’s a no-brainer to automate expense approvals and requests, including:
According to the Global Business Travel Association, 19% of all expense reports have errors in them. This creates a ton of hidden costs, since the error must be corrected manually, which takes away from a finance team’s valuable time. With automated expense management software, there’s no manual inputting of expense reports. This dramatically reduces the likelihood of an error occurring, achieves significant cost-savings, and also helps ensure policy compliance.
Submitting expense requests and waiting for approval is an annoyance for both sides. But it can be particularly irksome for an employee who’s stuck waiting to see if they’ll get reimbursed for things like travel expenses or if their spending request is approved. This way, employees can be confident that they’ll be taken care of with travel expense reimbursement.
When you have an easy-to-use automated expense management system, no one's time is wasted. Instead of spending valuable work hours on manual logging and processing, they can focus on the important tasks that actually require their expertise. This automated accounting increases productivity for both the employees making the expense request and the finance and accounting teams that have to deal with them.
Real-time spending tracking gives you the ability to either take a bird’s eye view of your entire organization’s spending or to zoom in on a single employee. With a deep understanding of the importance of expense management, your team can better manage cash flow and make informed financial decisions based on the remaining budget when using real-time accounting solutions.
With expense automation, the expense request is sent instantly and the manager can approve it in a flash. There’s far less time wasted waiting around for a response. There’s no paperwork, no spreadsheets, no duplication.
When you run a business, it’s vital that you’re constantly finding new ways to optimize your business process. Automating expense requests and approvals and instant accounting are just a few ways Ramp can help make your life easier and your business more efficient.
No more chasing after receipts or memos. Reach out to the experts at Ramp to make expense reports a thing of the past.
Close your books fast. Give your people back their time.
Check out our ebook on creating a digital expense policy to help you control spend: