How to handle the hidden dangers of reimbursement costs
from our US office
Handling growth is one challenge that all businesses want to be facing. It’s the hallmark of a successful company which is expanding and evolving. But it’s when a company start to grow that scalability issues emerge. Seemingly insignificant areas of a business can transform into administrative monsters.
The management of expense reimbursements is one of the areas that, if you’re not careful, can develop fangs. What catches so many companies out is the fact that controlling employee costs doesn’t initially pose a major challenge for a start-up.
This is why bosses don’t tend to spend too much time worrying about exactly how reimbursements will be managed. The majority use traditional ways – paperwork, Excel spreadsheets and manual processing. This is a decision that can prove extremely costly as the company grows – causing financial losses, organizational slowdown and compliance risks.
Collapsing expense reimbursement systems
This is a legacy of businesses putting systems in place that rely on manual processing and are incapable of handling the administrative demands of a larger and more complex company. It’s a scalability issue that can be removed by the move to next-gen expense systems that combine automated processing with cloud-based data handling. But to understand the benefits, it’s worth looking at the scalability weaknesses of traditional systems. This is rooted in the need to manually transfer information across a company.
As a workforce grows and the number of expense reports ramps up, back-office staff start to become deluged by the amount of paperwork that needs to be dealt with. It creates a slow and error-prone way of working with insufficient time to check or challenge the validity of reports. The lack of policy enforcement provides a breeding ground for workplace fraud.
It’s estimated that U.S. businesses lose in excess of $2.8 billion each year to falsified and exaggerated reimbursement costs.
As well as these financial losses, there’s the heightened risk posed by compliance breaches and the danger of proving inaccurate and misleading tax information to the IRS (Internal Revenue Service).
Scattering of employee expense information
The other scalability flaw with traditional management of employee costs is the way that information starts to become dangerously fragmented as a company expands.
When an organization evolves from a single office to multiple locations, information gets scattered and ‘siloed’ in a multitude of different documents and spreadsheets. Without any simple way to synchronize this data, finance teams find themselves struggling to keep on top of which information is accurate and up-to-date.
It’s to remove these issues that more companies are switching over to cloud-based management. A system such as Webexpenses is future-proofed to grow alongside an organization. It does this by virtually eliminating the need for paperwork, spreadsheets or manual processes. Employees use a smartphone to convert any paper receipts they receive into a digital form.
Cloud control of expenses
Accurate information on every aspect of expenses is automatically tracked and stored, allowing costs to be properly checked to ensure legitimacy and compliance.
The cloud-based software allows all expense information to be made instantly accessible to a central finance team and removes the problem of fragmented and out-of-sync data. Webexpenses also features integrated reporting tools to maximize the benefits of having access to such a wealth of information. Reporting tasks that would take hours or days with a manual setup can be completed in minutes.
It creates a system which is fully scalable and future-proofed to handle anything from the basic demands of a small start-up to the complexities of a global operation.
By understanding the challenge and making the right choices from the start – expense management is one growing pain that businesses no longer need to face.
Webexpenses provides a smarter way to manage employee expenses. Learn more and request a free demo here.