Companies that heavily invest in business travel will tell you that their biggest challenge is not winning deals or attracting sales but managing T&E spend effectively. This difficulty in managing business expenses when you regularly have employees on the road can be attributed to traditional expense management methods, namely the reliance on one inefficient component—paper receipts.
Paper trails are known for their ability to disappear at inconvenient times. The tasks of safely storing receipts while traveling and consolidating business expenses into reports on reaching the office are of prime importance, and prone to being done poorly as a result of being so tedious.
Fortunately, digitization is trending among businesses (even more so since the start of the pandemic). According to a report by Finances Online, 70% of businesses have a digital transformation strategy in place or are working on one. Opting for automation with expense management software has numerous beneficial implications for a firm—firstly, it simplifies the lives of business travelers and finance teams alike. It also boosts sustainability (did you know that three million trees are cut down each year to produce receipts that most people simply discard?), offers real-time insights into the expense patterns of your employees, automates compliance, and helps keep spend and budgets under complete control.
Here are some top benefits of paperless expense reporting:
No more paper trails and lost receipts
Apart from the tedious manual process, the most obvious reason for delayed report submission is lost receipts. Let’s say you’re a business traveler who has failed to store the receipt of the cappuccino you had at the airport. Given how pricey beverages at the airport are, you’ve lost at least $15. You end up losing two more receipts on this trip: first a food receipt and then a fuel receipt. When they add up, you’ve lost quite a sum.
With automated receipt tracking, the amount of paperwork that employees have to maintain is drastically reduced. Built-in receipt imaging is an even better feature that allows business travellers to simply capture a picture of a receipt with their mobile phone as soon as the transaction is complete, with the data from the receipt mined to create an expense automatically. The receipts are then uploaded to the cloud, solving the problem of losing them. Furthermore, some software allows travelers to forward receipts to a designated email address for immediate submission. This allows the resources that are usually spent on accounting for missing receipts to be spent productively instead.
Reduced clutter and costs
Many governments require businesses to maintain tax records for a certain period—for instance, the IRS mandates storage of records for six years. For safe storage of the receipts and to manage the clutter created by them, firms often invest in archive boxes and storage space.
In the long run, this ultimately leads to unnecessary funds spent on storage and safekeeping. When SMBs had to cut costs during COVID-19, one of the main areas targeted was storage space—for a small business owner, every dime is valuable, so many of them would rather spend on operations and marketing than on storage boxes.
Receipt management solutions help migrate receipts to the cloud seamlessly. No more large boxes taking up office space, and you can save the funds spent on them too! By storing digital receipts on the cloud, you can access and retrieve them with a few clicks instead of spending hours sifting through paperwork to find one specific receipt.
Streamlined workflows and processes for finance teams
Receipt management that involves paper receipts is prone to fraud and regulatory non-compliance. Even when there’s trust between the submitter and the approver, your finance team has to be diligent and cannot function on the benefit of the doubt. Most finance teams across the globe are under severe strain due to the significant quantity of reports they have to process.
Employees losing receipts, submitting the wrong ones, or using online tools to create fake receipts that appear genuine, only add to your finance team’s misery. At times, employees end up submitting crumpled receipts or scanned receipts with minimal visibility which make it impossible to link the claims to the right purchase. If even a few expense reports turn out to be erroneous as a result of these factors, the processing time per receipt/expense report becomes much longer.
With digital receipts, the information is captured clearly and can be shared with the finance team without having to make hard copies. The entire process is quick, easy, secure, and makes employees feel accountable for every expense claim. Digital receipts lead to a centralized repository of all expense claims, with which finance teams can verify the receipts against claimed reimbursements. On the whole, this keeps the company’s accounts audit-ready.
Comprehensive T&E management analytics
Connecting expense management analytics with forecasting and future planning is one of the industry’s well-known best practices. This requires finance teams to be well-equipped with comprehensible expense reports (accompanied by receipts) to gain insights into employees’ T&E spend behaviour and answer all the questions that arise during data analysis. When done with a paper-based system, this can be arduous and take up time and resources that most businesses cannot afford. For instance, finance staff would have to look over past expense claims and collate information manually.
Expense management software can compile relevant data automatically and present it as meaningful analytical reports. These reports offer finance teams much-needed visibility into where and how the funds are being spent and help spot opportunities for increased efficiency. With digitization, you get easy access to updated information that can be used to shape your firm’s expense policies and budgets, and maintain compliance.
Hassle-free tax seasons
If you’ve been using paper-based systems, you wouldn’t be surprised if your accountant complains about missing receipts during reviews. This generally leads to the accountant contacting the finance team and waiting for the team to track down the documentation (which often won’t materialize) or find an appropriate substitute.
Automation is a straightforward way to solve this problem and save your firm’s money and time. A manager or admin who reviews expense reports as soon as they’re submitted by the business traveler can reject reports without proper receipts in a few clicks. You can also set up workflows to automatically reject reports that have been submitted without receipt attachments. This will prompt employees to obtain and attach the right receipts as each expense is incurred. There is no risk of losing or throwing digital receipts away, and you won’t have to deal with books that don’t balance at the end of each month.
Trees are cut down at an alarming rate to produce paper—so much so that 42 percent of all global wood harvest is used to make paper. Going paperless is one of the best ways to reduce deforestation and limit the amount of discarded paper filling up landfills.
Automating receipt management is much more than making life easier for your employees—it also helps save the environment and simultaneously reduces other business expenses as well. While you’re at it, improving the sustainability initiatives of your firm can also lead to a stronger brand reputation. Customers are increasingly considering the corporate sustainability image of the brands they purchase from, and they’re more likely to pick brands that are socially responsible.
Here’s your takeaway!
By switching to receipt tracking software, you can reduce your chances of fraud, erroneous reports, and policy violations, and manage to save time and money along the way. Furthermore, you can reduce the environmental impact caused by paper receipts by choosing a better alternative. Receipt management solutions like Zoho Expense have built-in features to help business travelers better manage expenses by digitizing and storing all their receipts in one place, then automatically exporting them to the connected accounting software. Try Zoho Expense now and find out how it can help your business.