Approving Expenses for Employees in Real-Time: Why it’s Vital and How to Do It

Spend management in the workplace can cause difficulties, especially when it comes to expense tracking and reimbursing employees in a timely manner.

Employees often need to wait weeks to be reimbursed for company purchases. Managers, on the other hand, wait till the end of the month to receive the expenditure reports, then the finance team spends a lot of time sorting out proper expense documentation for that time period.

It seems like every step of the process has some form of delay involved. The time taken for purchases to be approved, completed, and reimbursed is simply way too long.

Thankfully, there are ways to manage company expenses efficiently and in real-time. And that is what we will discuss in this article.

Why is Expense Tracking Important for Your Business?

The conventional form-based expense tracking system is very inefficient and time-consuming. Despite these problems, it is the most common way of dealing with expenses in a business. They end up costing a lot of money to file, document and process in the long run. 

These expense claims are also prone to error, and you can end up losing a lot of money in the process as well. According to the Association of Certified Fraud Examiners, companies lose 5% of their annual revenue due to occupational fraud. When problems like this occur, you end up spending much more than your estimated budget. 

In addition to exceeding your budget, the overall productivity of your work is also hampered by a needless focus on expense reports. 

So, we can see that it is important to track business expenditures to avoid going overboard with the budget. But the problem is with manually operated expense reports. 

The solution is to make the approval process quick, real-time, efficient and automated. Here’s what you can do to help tackle this issue.

Instant Real-time Employee Expense Tracking

Modern spend management tools are a must if you want to make your expense tracking as seamless as possible. If a purchase needs approval before it is confirmed, an employee can simply add it to the software. Their manager receives a notification about the same and there is no more delay in the process. 

With a clear documentation process, your finance teams are able to tally the purchase reports as soon as they are approved. As a result, you have a detailed and comprehensive report of the total expenses incurred. You no longer have to worry about budget surpluses at the end of the month.

What Does the Process Look Like?

Now that we have discussed why an expense tracking solution is necessary, let’s take a look at the process involved.

Submitting the Request Form 

Keeping the spend management system simple is very important. The request form should only ask for what is required: 

• Name of the vendor
• Cost of the purchase 
• Whether the expense is one-time or recurring
• An invoice or documentation of the purchase 

Flow of the Message 

Once the request form has been submitted, it should go to the correct people for approval. The employee should also be able to see who is expected to approve the purchase request. 

The purchase can be approved by people higher in authority as the amount rises. For example, a manager can approve an expense report up to $500, and higher amounts need to go through directors. 

Depending on your company’s spending policy, different authority figures can approve the request. All these things can be configured based on your needs. 

Approval or Denial of the Request 

The person that needs to approve or deny the request should have clear options to do so. Moreover, they should also be able to correct the expense amount if needed or add notes depending on the request as necessary. 

Many payments that businesses have to make these days are recurring. These subscription-based expenses can add up quickly if they are not managed. With a clear view of the subscription invoice and the cost, the employer can make decisions more clearly. 

Conclusion 

As a business, it is essential to operate under a budget and maximize productivity. And using a spend management tool helps you do just that. 

Mesh Payments’ spend management tool is one of the best products to help you achieve an efficient workflow and keep track of company expenses. 

Take control of employee expenses in real-time and enjoy a better workflow, starting today.

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Chavi Kramer