Tracking expenses is crucial to the success of any business, but expense reports aren’t as useful as you might think. They’re time-consuming, tedious, and, quite frankly, not a good use of your employees’ time or money.
If you’re looking to implement an efficient expense reporting process for your organization, simplifying these reports—or getting rid of them altogether—may be the ideal move. The best part? It’s easy to do.
So, let’s take a closer look at expense reports, why they’re keeping companies from reaching their full potential, and how to simplify your expense management process.
An expense report is a document that indicates the amount of money an employee spent on different types of expenses. Expense reports allow companies to review the expenditures employees incur on their behalf, verify that they’re accurate and in line with their expense policy, and reimburse team members for these purchases.
When employees pay for company expenses with their own money, they typically fill out an expense report to get those funds reimbursed. Say you’re attending a business conference on behalf of your organization. At the very least, you’ll need to pay for your lodging, meals, airfare, and other travel expenses. But without access to a company card, covering these expenses upfront falls on you.
This document will differ between companies, but a typical expense report includes:
Despite their widespread use, manual expense reporting ultimately holds businesses back. Here are a few reasons to kill expense reports in your business:
The reporting process typically requires an employee to record information on their purchases and one or more to review the document (or Excel spreadsheet). It can take up hours of your team’s valuable time—even more of it if any mistakes are found.
And contrary to popular belief, expense reports don't actually prevent expense reimbursement fraud. According to the Association of Certified Fraud Examiners, expense fraud costs businesses about $1,400 a month on average.
People aren’t perfect. With manual expense reporting, there’s always the risk of introducing inaccurate data into your organization’s financial statements.
Even the most diligent people will make (or fail to catch) mistakes when they create expense reports. And every time a report is handed off for review, it becomes another opportunity for error.
Over time, the compounding of these inaccuracies can dramatically impact your company’s bottom line. And when leaders lack confidence in their financial reports, that translates into a lack of confidence when making important business decisions as well.
Company expenses are not an employee’s responsibility. Purchases that benefit the company shouldn’t be at their expense either—even if it’s temporary.
A 2018 Conferma survey of UK employees revealed that 37% of respondents had to wait 2 weeks or more for reimbursement of work-related expenses. Another one-third reported personal financial issues as a result of their employer’s reimbursement policies.
And as mentioned earlier, people make mistakes. Businesses that rely on their employees to cover company expenses shouldn’t fault them for losing a receipt or being too busy with work to request reimbursement.
Documenting your company’s policy on employee expenses helps keep everyone on the same page, reducing the chance for costly errors or misunderstandings.
If you don’t have one yet, Ramp’s guide on creating a travel and expense management policy can walk you through the process. You’ll also find best practices, implementation tips, and an expense report template to use as the foundation for your company’s guidelines.
Once it’s created, communicate any changes to your employees, send them a copy of the policy, and add it to your employee handbook.
If you need more guidance, check out our expense policy generator.
Treat your expense policy as a living document. Your company’s needs and spending habits will evolve over time, so you’ll want to regularly revisit and update these guidelines accordingly.
Reach out to your finance and non-finance employees for feedback and suggestions on improving their experience with it. Consider things like bottlenecks, recent changes within the company, and future initiatives. Review expense data for discrepancies, errors, or policy abuses that come up regularly.
Update your policy to address these findings. Then, send out an updated version to ensure your employees understand and implement the changes.
To make it as easy as possible for your organization to adopt and follow your expense management policy, consider going digital with automated workflows. Expense automation allows companies to:
With expense reporting software, companies can also deploy expense policies across remote or distributed teams with ease. The best expense reporting software also integrates with your accounting software, which simplifies budgeting and financial management in the long-run.
Even with a digital expense tracking system, reimbursements take time—time your employees may not have if they have credit card payments or bills due. You can reduce this friction and avoid having employees foot the company bill with corporate cards.
Company cards automatically manage expenses and collect receipts on behalf of their users, rendering traditional expense reports unnecessary. This solution simplifies expense management across the organization—from employees and managers to finance teams and business leaders.
Ramp’s corporate card program makes expense management and reporting effortless.
Take advantage of business spending controls that can be as broad or specific as you need, plus no fees and unlimited 1.5% cashback on every purchase. And combined with our powerful expense management software, you can review your company’s spending across thousands of cards at a glance.
Of course, in the few cases where employees do need to use their personal card, Ramp also makes expense reimbursements easier and faster.
Don’t bog your team down with the burdensome accounting processes of yesteryear. Breathe new life into your expense reporting (and your workforce) with the Ramp corporate card.