Why More Companies Are Turning To Expense Automation

Delivery apps. On-demand entertainment. The world today moves at the pace of immediacy. But not every industry has caught on as quickly as others— the spend management process, for instance, consistently lags behind. 

It involves chasing receipts, compiling spreadsheets, and slogging through monthly reconciliations, only to find errors in need of correction. Companies spend approximately half a million dollars and 3,000 hours correcting expense reports each year, according to the Global Business Travel Association.

What is Expense Management Automation?

At its core, expense automation is the use of modern technology to streamline the recording, tracking, and approving of expenses incurred by employees for business-related needs. However, how this manifests from company to company will vary greatly depending on their financial operations. When automation is deployed efficiently, finance departments can streamline workflows to eliminate wasted time on manual data entry.

The Pains of Legacy Solutions

Many companies currently host technology stacks for expense-related processes. However, a lack of transparency and synergy in these systems means many financial leaders are unaware of how many hoops one transaction goes through for reconciliation.

Below is the tedious trek of one receipt in a traveler's journey:

• An on-trip employee collects a paper receipt from an airport bodega.
• Within the next expense cycle, that employee uploads the data of that receipt into a spreadsheet-based expense report.
• A finance or accounting team member or direct supervisor reviews this report and deliberates whether the uploaded transactions are within policy.
• An accounts payable team member receives the report and uploads all the transactions into their respective accounting system.
• The submitted receipt is then verified as legitimate.
• All receipts for this expense cycle for all employees are entered into the file for tax and accounting purposes.
• The correct tax codes associated with the various transactions are entered into the expense report.
• The expense report is uploaded to the company's accounting system or ERP for auditing and accounting records.
• Reimbursement for the out-of-pocket spend by the employee is authorized and issued to the employee via next payroll disbursment, depending on when submitted.

Phew, did you get all that?

The Automated Possibilities of Expenses

With the number of modern solutions available to companies today, there is no reason for the expense reporting process to be so complicated. On average, it takes 20 minutes and costs $58 to manually process a single expense report, according to that same GBTA survey. That's a lot of time and money wasted when more significant tasks are at hand—like growing a company. Some key features of automated expense management systems include, but are no means limited to:

• A streamlined path for employees to submit and manage their expenses
• A process for submitting business expenses from anywhere worldwide via a desktop or mobile app.
• Real-time expense data extraction for business-related transactions that simplify filing systems.
• Immediate notifications for finance teams if expense policies are violated.
• Direct ERP and accounting system integrations that immediately connect across tech stacks.
• Granular level data reports for company spend tracking and budget control.
• Auto-approved expense reimbursements put money back into employees' hands faster and increase trust and satisfaction if out-of-pocket spend occurs. 

But where else?

Auto-approve the majority of transactions, so they only have to manage by exception

A critical component of modern T&E solutions is the ability to recognize and auto-approve spending tied to business and travel expenses and automatically reconcile the payment.  

Only a full stack solution with context into travel, policy, employee, and payment vehicle can do this. This process takes a time-consuming and lengthy paper trail and turns it into a single button.

Integrate corporate cards with built-in policy controls

Issuing corporate cards offers a ton of benefits, but it can also make companies feel vulnerable to employee misuse. With corporate credit cards and p-cards hosting built-in policy controls, finance teams can easily create spending policies for a full range of expense categories tailored specifically to their company.

These expense policies are programmable into the corporate card so that employees can't spend beyond the realms of the company-mandated limits.

Accelerate month-end close with receipts and reconciliation

When reconciliation is instantaneous, finance and accounting teams have immediate knowledge of how much is being spent and what it's being spent on. This makes it more effective for finance teams to manage cash flow and allows for accurate budgeting, planning, and forecasting. Automated reconciliation allows finance teams to mitigate financial risks. Through real-time spend visibility, finance teams can spot irregular purchasing activities and respond quickly to reduce fraud and support secure, compliant transactions.

Leveraging modern technology for modern companies

Automation provides an opportunity to save money and time—and get a jump on the competition. That’s where Navan’s travel, corporate card, and spend management solution can help. It not only streamlines a company’s process today, but grows with the business as it expands.

“Because Navan Expense automatically organizes receipts by general ledger account category, department, or cost center, we’re able to accelerate the reconciliation process of those expenses at least six times faster than the usual process of working with an expense management tool,” said Jasmine Pope, Procurement Travel & Expense Analyst at Lyft.

Leveraging smart systems like Navan Expense that combine the power of virtual cards with an end-to-end spend management system empowers finance teams to do more with greater agility.

Ready to streamline company spending and eliminate expense reports? Schedule a demo to see how our spend solutions work, or get up and running with Navan in just 5 mins.