EXPENSE-AUTOMATION
Finance tools & tech 6 min read

Expense automation: How to automate expense claims and approvals

Stephanie Bowker

Nobody likes expense reports. Not the average employee, who has to spend hours at the end of the month finding receipts and checking credit card bills.

Not the finance team, who has to chase up those same employees for proofs of purchase and manually enter hundreds of lines in a spreadsheet.

Not the CFO, who thought the budget was all under control until thousands of pounds suddenly had to be accounted for.

And not the accountant, who just needs everything done properly and can’t understand why the codes are a mess.

Expense reports are a hassle, and we want you to get rid of them for good. But sometimes, you just can’t avoid them. If your employees ever need to pay out of their own pocket, you’re legally obliged to pay them back. And to do this, they have to file a boring old report.

But there are ways to make this process less painful. Let's see how expense automation can help your business.

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Why we still use expense reports

If you’ve got prepaid and virtual cards, your employees should almost never have to make work payments with their own money. Which is the way it should be.

But of course, there are exceptions. These include:

  • When a particular employee doesn’t have access to a company card
  • If a team member loses or forgets their card
  • When a merchant doesn’t accept certain forms of payment or only takes cash
  • When the card fails

No matter how hard you try, your team members will be in one of these situations from time to time.

When your team members find themselves paying with their own money, the last thing you want is to then make the experience worse with slow paperwork. Let's try to make the best of a bad situation.

What is expense automation?

Expense automation lets you eliminate the most painful aspects of filing and processing expense reports. It replaces the paper or Excel claims that most employees know too well, typically with a spend management app that walks the user through each claim. 

While this could come in many different shapes and sizes, good automation follows a classic structure: 

  1. The employee spends their own money on a business expense.
  2. They immediately log this expense in their automation tool. A mobile app is best, because they'll always have it them.
  3. They take a photo of their receipt and attach it within the app (before it can get lost). They check the details and submit the claim.
  4. Their manager is notified immediately and can approve (or deny) the new expense. 
  5. If approved, it's sent to the financial controller. They can choose to approve it immediately, or wait until they have a batch.
  6. The controller simply checks that the details look correct and match the receipt, and then can process it in a click. There's nothing to add, and no data entry needed.
  7. Either immediately or at the end of the month, all processed claims are sent to the company's accounting tools, and the employee is reimbursed.

All in all, it's a very straightforward system. No data entry for your finance team, and no need for complex expense policies. The tool ensures that everybody spends how they're supposed to, and keeps errors to a minimum.

Why automation is so exciting

Few business processes are more disappointing than expense reports. We ask employees to pay with their own money, then effectively punish them further with paperwork just to get their money back.

And worse, this paperwork then lands on their manager's desk, the finance team's too, and the accountant's.

Fewer errors

20% of expense reports are filed incorrectly. These errors add up, and can become a serious time drain for your teams. And that assumes you catch these mistakes in the first place. 

Because automation tools walk employees through claims step by step, it's far more difficult for errors to slip through. And these tools come with OCR technology that reads receipts for you and ensures they match the claim.

Fast to file...

Even assuming that every expense report is perfect, they still take far too long to submit. Team members have to find the report template, fill it out row-by-row, track down their receipts, cross-check every detail, and figure out the right person to send it to. 

Which is made worse by the fact that they really don't want to do all this

With automation, they simply note each expense the moment it happens, and their work is done. 

...and even faster to process

Paperwork is every finance team's worst enemy. The pile builds every month until the dreaded "closing time," which is usually days of painful data entry and fixing errors.

But automation removes the paper altogether. It also removes unnecessary spreadsheets and duplicate work. Every claim is already in the system, ready to be approved (or not) by the financial controller. 

Works in real time

One of the most common complaints from CFOs and finance leaders is the lack of visibility over company spending. In fact, 57% of companies have this problem. And much of this comes from the asynchronous nature of expense claims - you don't know what you've spent until the claims arrive.

Since automation tools let employees submit expenses in real time, finance teams always know what's been spent. Which makes budgeting and forecasting more responsive and more accurate.

Keys to good expense automation

The process above is smooth and straightforward with the right tools in place. So if you're implementing automation in your own company, what should you look for?

  • Simple set-up. This is always a balancing act, and depends on the size of your company. Some expense management software is so complex that it takes six months to set up, and a team member to manage it full time. 
    That won't suit scaling and fast-moving companies. If you're one of these, check that your tool comes ready to use.
  • Scalable as you grow. Related to the first point, it also needs to be easy to add and remove users any time you like. 
  • Different permission levels. Ideally, you'll have one account owner for the whole platform. This is usually the financial controller or occasionally a CFO. Then you'll have managers who can approve their own team members' spending, and employees who can make payments and request reimbursements.
  • Built-in approval flows. Step 4 in the process involved a manager being notified. This is essential - every expense should be approved by the person in charge. But it's important that this happens naturally in the workflow, and doesn't require your financial controller to follow up with managers individually. 
  • Good accounting integrations. The last thing you want is to have automation in place, but be stuck copy/pasting everything into our accounting tools. Expense software should talk directly to the other platforms your finance team relies on. 

Overall, the goal is to save time and effort. So the tool you ultimately land on needs to help you achieve both.

Automated expense reports with Spendesk

We've listed our 10 favourite spend management platforms in another post. So here, we'll just focus on what makes ours the best around.

If you’re going to have to deal with expense reports, we want it to be a breeze. Here’s how simple automated expense reports are with Spendesk.

  1. Your team member pays for what they need.
  2. They open the Spendesk app (on mobile or desktop) and select Make a new request.
  3. They hit Submit an expense and upload their receipt. (With the app, they simply take a photo of it).
  4. Spendesk can read the receipt and will pull out the key details.
  5. They add any necessary extra information (a note for the manager, for example).
  6. They submit the expense to the finance controller.

That’s the whole process! And if they do it as soon as they pay, there’s nothing to lose, forget, or get wrong.

Why this is so exciting

So the expense report process just got simpler. But why should you care?

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Save huge amounts of time

Instead of waiting until the end of the month, your teams can file expenses as soon as they’re accrued. The walkthrough process is so quick that what used to take hours will only take seconds each time.

Plus, our helpful OCR bot Marvin reads what’s in receipts and can fill in reports automatically. So in most cases, filing expense reports is completely automatic.

Even better, there are no mistakes and no missing receipts. Every report is filled in correctly, because Spendesk helps your employees through the process.

So employees save time when they file, and financial controllers save even more they process expenses.

Store receipts digitally, immediately

One of the biggest issues with traditional expense reports is lost or missing receipts. Even if your team members manage to keep them all somewhere safe, they then have to scan and send them to the finance team, which then has to match them up with payments made.

There’s plenty of room for error, and also a lot of double-handling of receipts.

If your teams use the Spendesk mobile app, they can file expenses the second they occur. They just take a photo of their receipt, and add it to the entry for that payment. It takes seconds, and this expense is now saved for them and the finance team to see.

And since e-receipts are now legal in much of Europe, you won’t even have to digitise your old bits of paper.

Don’t save them until the end of the month

The biggest headache for employees and finance teams is the end-of-the-month rush to file expenses. Sales teams are known to have expense report “parties” - whole afternoons full of nothing productive, just filling in forms.

If they’re out in a restaurant or taxi, they simply open the app and fill in a few lines. They can save the receipt (as above), and this expense is sent directly to their manager and the finance team.

So no surprises, and no risk that they forget to make a claim.

Ready to give it a whirl?

If you already use Spendesk, our Help Centre shows you how to submit an expense claim.

And if you’re new to all this, book a demo with us today. We’d love to fix your company spending for you.

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Finance tools & tech Expense management Spend management
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Stephanie Bowker

Stephanie Bowker is Head of Marketing at Spendesk. She loves great product marketing, cute animals, and dancing at 6am.