3 Ways to Improve Expense Management and Improve Cost Savings

If a business has been around more than a few years, chances are it has already been put through the cost-cutting wringer. Although many businesses have seemingly exhausted all their options to cut costs, companies continue to look for additional ways to take control of company spend.

It’s especially common for frustrations to surface regarding the lack of control over employee spend. According to a recent Forrester report, financial decision makers ranked travel and expense spend as the second most difficult expense to control. And it’s not just a C-Suite issue. Frustrations run company-wide.

Departments and individuals must answer for their own spending patterns, but when those answers are hard to come by employees often feel like they’re being asked to squeeze blood out of a turnip. Furthermore, when expenditures are high and there are no obvious ideas on how to mitigate them, some companies resort to an indiscriminate travel freeze – which is frustrating, confusing, and downright costly to all involved.

So, how do you cut spend when you’ve already cut spending? There is a better, more lasting way to expense management nirvana. To get there, companies must rethink cost savings. Below are three tips for small businesses to achieve this:

1. Choose an automated data system

It’s no wonder companies struggle to find cost cutting answers: more than 80 percent are still collecting expense data through manual processes, but these systems do not allow for actionable insights or real-time control over company spend because everyone’s time is devoted to pulling the data together.

Most of the same companies struggling with manual processes do not realize how much they are spending on the expense management system itself, and this cost is generally far greater than perceived or expected. Businesses think they are saving money by using a spreadsheet, but the costs in time and lost productivity for employees, as well as lack of insight into employee spend patterns, can actually be more expensive. This is certainly an irony that could be avoided.

Enforcing policy (or creating one) and proactively managing spend is an uphill battle for companies with manual expense processes.

For many companies, there are three ripe opportunities:

Save money on the company-wide process of managing expenses
Identify new cost-saving opportunities that remain hidden with a manual solution
Prevent unnecessary cost overruns and out-of-compliance spending with a smarter system that enforces rules, sets preferences and enables efficient workflow in real time

2. Empower Employees

No one has ever said, “I can’t wait to fill out my expense report today!” or “I’m so excited to review all the expense reports that were submitted to me today!” So, there’s no way to make it a completely enjoyable experience, but there are ways of making sure the process is less of a chore for employees.

Sit down with stakeholders to hear about their expense-related tasks, to learn what their biggest frustrations are and what they find the most confusing. Hearing how employees really feel about processes oftentimes leads to shocking revelations about the workflow of a system. It also can lead to important, useable information on why problems continue to surface. Armed with this information, changes can be made to ensure policies are clear and the process is simple.

With the growing availability of mobile technology (both for consumers and enterprises), and BYOD becoming more and more commonplace in corporate offices, providing an option for on-the-go expense capturing can make a huge difference in employees’ mindset towards expenses.

With almost everything available at the tap of a finger, employees are coming to the general consensus that work processes should be as simple as ordering something from Amazon: easy, transparent, and fast. Especially for companies whose employees travel often – keeping track of all those receipts can be a nightmare – a mobile offering can provide a more enjoyable experience for users.

3. Manage budget more effectively with real-time data

For those who book travel or manage departmental budgets, making informed decisions is far easier when using an automated system because the current expense policy is “built in” and real-time data is always available. Having visibility into employee spend as it happens allows organizations to better understand when and why employees spend.

This provides more accurate estimates for overall company costs, which is especially important for small business owners who can’t afford unexpected expenditures

Achieve expense management nirvana by empowering people and policy at the same time. Listen to employees and make sure policies are reasonable, understood, and adequately managed.

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Jerame Thurik is the General Manager for SMB North America at Concur, a global provider of integrated travel and expense management solutions for businesses of all sizes.