Benefits of automated expense reporting

Quick insights

• Automating expense tracking may help businesses save time and money.
• Manual expense reporting could create more taskwork for employees and possibly result in additional errors.
• There’s a wide range of available expense management software that can help businesses automate parts of the process.

Many companies partake in business-related travel, which often involves expense reports. To properly file an expense report, employees likely need to save and upload all their receipts, manually enter purchase data and categorize each line item. Tackling this process manually may not be the best option for companies with lots of employees and business expenses.

One option to streamline this process is automated expense reporting. Automated expense reporting may be the right choice for companies who want to spend less time and fewer resources on expense management.

Below, we discuss how the expense reporting process generally works and the potential benefits of expense report automation.

Understanding the expense reporting process

Expense reports are itemized documents detailing business-related expenses incurred by employees. These reports are often created for reimbursement purposes. In other words, an employee may be reimbursed after using a personal credit card for business reasons.

Expense reports that are created and approved in a timely, accurate manner may help businesses keep an eye on cash flow and available funds. These details could potentially inform company budgets.

Businesses without many employees or expenses may prefer using simple spreadsheets for expense reporting. However, time spent on creating and approving expense reports could add up alongside increasing business travel and/or expenses.

Automating the process can be a helpful way for businesses to save time on administrative tasks related to expense management.

What to include in an expense report

Expense reports are typically structured as an itemized list of related purchases. Typically, employees will include the following information for each purpose:

• Date
• Brief description
• Expense category
• Subtotal
• Receipt

Including receipts can be important for recordkeeping purposes, as well as preparing for taxes.

Manual vs. automated expense reports

Opting for automated expense reporting could potentially remove some additional bookkeeping tasks from the process. Here are examples of how both types of reporting could work:

Manual expense reports

Manual expense reports are typically created with a simple spreadsheet. You may be able to find free expense report templates online to help expedite the process.

Generally, employees will save receipts and input details in the spreadsheet. Then, they submit the report to their manager and/or member of the finance team who reviews and approves reports. Once the expense report is fully processed and approved, the employee may receive reimbursement.

While most of this process is manual, employees may use spreadsheet formulas to automate adding up totals and subtotals. This may help avoid manual mathematical errors. If there’s an error in an expense report, the report could be rejected. This means the employee might need to start the process from the beginning.

Automated expense reports

Using expense management software can help automate parts of the expense report process. However, available automation features may differ between software options.

The process is similar to manual expense reporting, but some software can process receipt information. Then, it may be able to automatically categorize expenses and add up totals.

After the employee submits the report through the software, it is typically forwarded to anyone who needs to review and approve it. After the report is fully processed, the employee receives reimbursement.

Benefits of automated expense reporting

Investing in expense management software may not be the right choice for companies without many employees or expenses. However, there are many potential benefits of expense report automation for companies that frequently create and process expense reports, including:

Reduced manual errors

If an expense report contains errors, it could cost companies money to correct it. This is because additional billable hours may be used for making corrections and processing the new report.

Automated expense management software allows employees to forego manually inputting and adding up expenses. This could help mitigate manual errors throughout the process.

Time savings

If an employee can skip the manual steps of expense reporting, they may be able to reallocate that time toward tasks that earn revenue or move the business forward. That time savings may be valuable to the business.

Financial visibility

Many expense management software options provide real-time employee spending insights. You may also be able to zero in on individual employee spending data. These details may help businesses better understand their overall spending habits, which could help employers create more realistic budgets and identify areas where they could potentially cut costs.

Companies may choose to pair expense management software with a business credit card that provides additional related benefits. For example, each Chase Ink business credit card allows the primary cardholder to set employee spending limits for employees using company cards.

Businesses using a Chase Ink credit card can issue individual employee credit cards at no additional cost. Primary cardmembers also get 24/7 access to account details, quarterly reports and up to 24 months of statement details. Bear in mind that some of these credit cards have an annual fee.

Streamlined employee reimbursement

It may be stressful for employees to wait to see if their purchases are approved for reimbursement. Using software that automates the expense reporting process could potentially streamline this process so employees know if their reimbursements are approved and when they will be approved.

Scalability as the business grows

If a business grows, it may hire more employees and incur more expenses. This could result in more expense reports each year. Using software that helps expedite the reporting process could help cut down on accounting tasks as a company scales.

In summary

Automated expense reporting can be a useful way to streamline the employee reimbursement process. But while expense management software can be a helpful investment, not all businesses have enough employees or expenses to offset the costs.

Business owners may want to review their fixed expenses, as well as how many expense reports they process each month. This could help to determine if it’s worth investing in software that can automate the expense management process.