How to Keep Track of Expenses for Small Business
Currently, 1 in 5 finance teams still use manual expense reports to manage operational spend (Spend Journal, 2020). This means using software like Excel to input data and manually create expense reports, maybe using a downloaded excel expense report template or creating one from scratch. Either way, with the advancement of technology this is an insane statistic, as it means so much time is held up in processing reports manually. Why do small businesses insist on using excel when there are much better solutions out there that overall save money?
Here are a few reasons you may still being using excel to manually process travel and expenses:
It’s highly available and accessible
Almost everyone has Excel installed as part of the Microsoft Suite, and if not you can access it online via Google Sheets. However just because it’s easy to access doesn’t mean it’s the best fit.
Lots of people know how to use it
You don’t have to learn something new, or pay someone to try a new piece of software. It’s not only self explanatory but most people have used it for many years, meaning it requires no time to begin using. However with expense automation software like Capture Expense, the ease of use of the software means very little training is required, mainly only for accountants.
Works on a small scale
You’ve not had any problems yet because your business is only a certain size, so why change? Unfortunately this is not forward thinking and when your business grows, as it should do, you can suddenly find you are having to put a lot more time into the expense process than planned. Not only will you have to do more chasing of receipts, but checking of errors and discrepancies. This snowballs and it’s a part of the business you don’t want to be spending time on as it grows.
Has always been the way you do it
Just because you’ve done it one way for a long time doesn’t mean it’s the best way! Even trying something as a simple demo can give you an insight as to how much better it can be with an expense management package.
Now on the flipside, what are the issues you may be facing?
Receipt storage hassle and lost receipts
Keeping track of many receipts is a chore and a burden, and bad management leads to greater inaccuracies and less Tax reclaim. This is a loss which is totally avoidable, and T&E management software really helps with this.
Poor visibility of spend
40% of companies have little or no visibility into how money is spent (Spend Journal, 2020). This tends to be from a lack of comprehensive and useable data. As we all know in the technology age, data is incredibly valuable and is lucrative industry, so why are you not paying attention to your own company data. Apps like Capture Expense not only help you input data correctly, but visualize and categorize the data for analysis.
Out-of-policy bottle necks and reiterating policy to employees
Two thirds of employees haven’t read their companies expense policy (All Star). This is understandable, it tends to a document which is overlooked when you’re first given it. However, this leads to a much higher rate of out of policy claims and a need to reiterate the policy to employees. One great thing Capture Expense does is provide custom policy reminders on applicable forms to ensure claims are filed correctly in the input process. For example, when putting in a mileage claim, a custom policy reminder can pop up reminder what they can and can’t claim back on.
Lack of expenditure control
How do you stop someone from spending too much when they have unlimited funds essentially on card? Expense management software can help create caps for spend, so they won’t spend more than they can claim back.
Overestimated mileage
Manually interesting mileage data can lead to way overestimated fuel costs, so using a program which has HMRCs rates automatically implemented and routinely updates eliminates this issue.
Backlogged reimbursement and chasing staff to submit claims
Due to the lack of automation in manual expense processing, you can often end up with big backlogs of reimbursement, as well as having to chase staff to submit claims on time. This is both stressful and a time intensive job. Using Capture Expense helps reduce backlogs due to the aid of automation, and due to the ease of use of submitting claims using the software it means chasing staff no longer becomes an issue.
Duplication and errors
One key issue with using software like Excel to manage T&E’s is the high change of duplication and errors. This can be due to having multiple versions of the same document, or not seeing the discrepancy between a receipt and the data input into a form. Capture Expense uses technology to check receipts against input data for accuracy, as well as maintaining consistency across all platforms, including both desktop and mobile.
Difficultly with Remote Workers
With Capture Expense being available both on desktop and mobile, staff can submit claims anytime, anywhere. With all the data saved securely on the cloud, it can be kept up to date and consistent, no matter where it is being sent from.
Of those who use software to help them process expense claims, only 10% of expense approvals are automated (Spend Journal, 2020). This is a very low number, even with the addition of technology and software to speed up the process. However, it isn’t enough as it’s all well and good using software to help you input your data, but if its just as slow as using an Excel template because nothing is automated, what is the point?
This is why you really should use expense automation software. Contact us today for a free demo to see for yourself how easy it is to set up and use and begin your journey of better visibility over money spent as well as reduced time spend on expenses.