Expense claims are submitted by employees to claim back costs that they have personally paid for in relation to their work on behalf of their employer. Claims might be for fuel, food expenses, other travel expenses like train or taxi fares, or for flights.
A traditional expense report is usually made up of multiple expense claims which are submitted for approval. Often employees gather up expenses to submit in one go rather than submit as they incur them, usually because the process of submission is time-consuming.
Digital expense management tools that allow you to submit expenses on the go from your phone have significantly increased in popularity. Some apps allow employees to take a photo of their receipt on their phone and upload it immediately. Optical Character Recognition (OCR) technology can extract the information that’s needed and automatically put it into the correct form. This information usually includes the date of the expenditure, the supplier name, the expense type and amount.
When expenses can be submitted at any time rather than all together in one form or report, this is called line-by-line expense submission. It cuts out the need for a monthly expense report and is fast becoming the default choice for expense management. This approach dramatically cuts down the time employees must spend doing travel and expense admin, freeing them up to concentrate on work that directly or indirectly contributes to company revenues.
So that companies know how their expenses budget is being used, employees usually need to code their expenses. In the past, expenses have been grouped by type, such as travel or stationery items. Today, leading organisations are more concerned with attributing expenses to a project or business activity, so they can understand the ROI.
For example, travel expenses incurred by sales executives would be coded to the account or customer that’s being visited. Sales managers can see how much it’s costing to close a sale and what the profitability is. So, an expensive flight and a prolonged city hotel stay could be excellent value, if the spend means an account manager was able to close a lucrative deal worth hundreds of times the value of the expenses incurred.
Expenses claim reports give company finance managers important cashflow information. If a large number of unexpected expenses claims come in at once, it can cause a problem. Offering easy means of submission, including receipt scanning and line-by-line expenses help companies maintain continuous visibility of expenses spending. They can take action to review claims to understand costs and make sure they’re supporting business growth. As the company builds up information about ROI and spending patterns, it’s easier for finance managers to forecast and budget expenses.
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