The COVID19 pandemic has posed an unprecedented challenge for CFOs to manage their company’s T&E spending.
Given the gravity of the situation, it is time for CFOs to step up and reevaluate the various expense management strategies that they have in place to keep business travel expenses in check and prevent fraud.
Notably, they need to invest in the digital transformation of the expense management process and embrace new-age technologies, such as Artificial Intelligence and Machine Learning to stay ahead of the curve.
Here, we list some of the top tactics that CFOs need to implement to streamline expense management in the coming years.
• Transparency in business travel spending
A dedicated expense management system can help CFOs bring about transparency in travel spending by accurately tracking expenses as and when they occur. Overall, an ideal expense management system can help you save loads of time and money while keeping your employees productive and satisfied.
• Clarity in the travel expense budget
Many businesses often point to business travel expenses as their most significant budget items. As a result, CFOs need to develop a travel and expense policy that is clear and reasonable.
This includes setting a maximum budget for each spending category in advance, like business trips, restaurant bills, etc., based on the department and employee designation.
Enforcing practical travel and expense policies can incur benefits like better employee expectations, audit readiness, spend control & insights, and fraud prevention.
• Establish accountability
Established processes help the employees to rely on and refer them regularly. The first step is to ensure that all managers, supervisors, and employees are aware of the organization’s expense policies. The management team must have easy access to the expense reports their employees are submitting. An expense management software brings more power to the managers with hierarchical or customized approvals for each department. It ensures a high level of accountability.
• Prioritize security
IBM and the Ponemon Institute’s latest data breach report reveals that the average cost of a data breach rose to $4.24 million in 2021, an increase from $3.86 million in 2020.
Consequently, organizations need to leverage modern technology, such as cloud-based expense management software, to keep your business’s sensitive financial information safe from security breaches.
• Regular audits
All CFOs should regularly audit their expenses to keep fraud at bay and detect lapses in the expense management process or policies. Expense management audits can pinpoint potential problems, like overspending or fraudulent receipts and help the finance team or managers to make strategic decisions.
• Digitize and automate your processes
According to a 2015 survey by GBTA Foundation, processing a single expense report takes an average of 20 minutes and costs a company $58. Automation eliminates paper or spreadsheet work, reduces admin work, and leads to faster processing of reimbursements.
So, if CFOs prioritize automating and digitizing the expense management processes, it will undoubtedly yield better results and allow your finance and accounting professionals to focus on the economic growth of the business.
• Make strategic decisions with expense analytics
Expense analytics reports give finance team and managers better and real-time visibility into:
• Employee expenses
These reports help you analyze employee expenses and view analytic reports of a policy violation to track excessive spending.
• Targeted insights
You can analyze and track expenses based on projects, category, merchants, etc.
• Real-time updates
You can track the number of reimbursements and cash advances processed for a particular period.
• Data-informed decisions
Statistics and trends related to expense reports and policy violations help you formulate better expense policies.
Hence, expense analytics in a company is extremely valuable for making data-driven decisions that can save millions of dollars in T&E spending. It further enables businesses to compare expenses with budgets to ensure they are not overspending or defrauded.
CFOs should consider implementing all the above strategies to take control of corporate expense management and make strategic decisions on future spending.
Intuitive software like ExpenseOut helps enforce travel & expense policies easier, thus saving your finance team time and effort.
If you want to learn more about the capabilities of ExpenseOut, then sign up for a demo today! Please reach out to [email protected] for more details.