Expense Reporting in the Digital Age

Machine builders tap automation technology to increase equipment efficiency and plant production. Now, they can automate accounting methods, too.

Are the days of stapling receipts and handing paper expense reports to the accounting department over? According to many of OEM Magazine’s readers, they aren’t, but they should be. OEMs are still keeping a paper trail of expenses related to field service and sales team travels. The reasoning: The old way works, and why fix something that isn’t broken? 

But it’s less about fixing something that isn’t broken, and more about modernizing a process that is taking up valuable time, and may actually cost a company money. 

Smaller, family-owned companies that process only a couple of expense reports a month may still get away with handling expenses by hand. But larger companies have had to adopt a more streamlined approach to handle dozens of expense reports at any given time—and to do that, they’ve turned to technology. 

Similar to how equipment has evolved with automation in the packaging and processing space, enterprise apps—like accounting software—have, too. To that end, automated equipment typically has higher throughput and efficiency. And software that automates the end-to-end expense management process can increase workplace productivity.

Whether your company—regardless of size—is in the market for a new expense management process or looking to improve the way it currently handles reporting, collecting, filing and paying expense reports, now is the time to explore the application options. To help, OEM Magazine spoke to some of the expense management software companies that claim to revolutionize the process. The vendors, including Zoho, Certify and SAP Concur, say that their digital and mobile offerings can decrease processing costs, increase policy compliance and eliminate costly errors.


Step away from the spreadsheet

Expense policies vary from organization to organization. For some companies, cash advances may be paid upfront, others may reimburse employees later. As expense reports trickle in, there are hundreds of receipts that pile up for the accounting team to go through. Each receipt is carefully audited to ensure employees aren’t expensing things they shouldn’t and that each expense is within policy. This can obviously be a tedious task whether a company has one person in its accounting department or 10. 

“It goes without saying that when expense reports are managed by using an inefficient manual process, it will result in errors, productivity loss for employees and revenue loss for organizations,” says Reshma Roy Suvish, head of marketing at Zoho, a company that offers cloud-based expense management software designed to streamline the process. “Without software to generate insights on the travel expenses, businesses will not be alerted to fix any faulty process they may have in place.”

Many North American companies with less than 1,000 employees, still use spreadsheets or paper to track and submit travel expenses, according to Bob Neveu, the CEO of Certify, a travel and expense management software company with more than two million users. So it’s not an uncommon method of expense reporting, but it’s not the most efficient, Neveu claims. 

PMMI’s 2017 Sales Expenses Quickie Survey revealed the same statistic. More than 60 percent of survey respondents said that they still use paper accounting methods. And, it takes more than 30 minutes to submit one expense report on average, according to the survey findings.

But by the same token, a handful of respondents noted that they use digital platforms and software to handle expense reports, and they are pleased with that process. 

“A majority of the companies we come into contact with have been doing their expense management manually,” Suvish says. “But expense management software can help finance departments to process expense reports faster and also reimburse employees quickly.”

Imagine being able to submit an expense report by just taking a photo of a paper receipt or importing a digital receipt into an app on your smartphone. With software platforms like Certify, Zoho and SAP Concur, manufacturers of all sizes are able to optimize their expense reporting process this way, especially when it comes to handling the increasingly complex expenses of traveling service technicians and sales teams. 

Traditionally, travel costs form a major chunk of a business’ overall expenses. Business travel spending worldwide reached approximately 1.3 trillion U.S. dollars in 2016 and was forecasted to rise to 1.6 trillion U.S. dollars by 2020, according to Statista.com. With so much money on the table, it’s critical for a machine builder’s finance and accounting teams to accurately track and monitor these expenses as efficiently as possible.

“The travel environment has become increasingly more difficult to manage, and it’s an everchanging landscape,” says Christal Bemont, senior vice president and general manager of SAP Concur’s global small and midsize business unit. SAP Concur provides cloud-based travel, expense and invoice management services and currently has more than 55 million users. “Because employees have access to many different ways to book and prepare travel, it makes it challenging for an organization to manage and have oversight on what employees are spending.”


Your team is mobile, shouldn’t your expense reports be? 

Expense reporting is moving toward a more digital landscape, and Certify’s Neveu predicts that paper accounting methods, as well as paper receipts, will be a thing of the past within the next five years. This shift from paper to digital is even more reason to rethink the way your company manages its expenses and deals with expense reporting and payment. 

To assist companies in switching over to a more digital method, Certify’s mobile application allows users to take pictures of receipts. The app automatically extracts the data from the receipt and fills out the expense form for the user. The user can also add in additional details such as which project they are working on, the reason for their trip and other information that may not be included on the receipt. 

“When you’re traveling, it can be hard to keep track of receipts, and a lot of receipts are sent digitally now,” Neveu says. “Whether you need to submit an expense report every week or once a month, the app makes it easy for users to store receipt data and then route the report to the accounting department or their supervisor when they are ready.” 

At the supervisor and accountant level, they can be notified that their employees have expense reports pending approval and  review the reports on the mobile phone app or through an online portal. 

Once a user in the accounting department logs into their company’s portal, they will see a queue of expense reports. And while digitizing this process doesn’t cut back on the amount of expense reports submitted, it can streamline how these documents are evaluated and processed. A distinct tool in the Certify application is the ability for the company to establish their travel and expense policy (T&E policy) within the platform so that the software can filter through every expense report to see whether they comply or are in violation of the policy. 

“If you have 10 people who submit an expense report and they all have 10 receipts each, there are 100 different expenses that have to be sorted through,” Neveu says. “But by importing a T&E policy, the system is constantly checking the data imported from the receipts against the  policy. That way, the accounting team can easily approve the expense reports that are found in compliance, and they can focus on the exceptions that come back as a violation. So out of those 10 expense reports, there may only be three that contain violations, like a missing receipt, being overbudget, or seem like a duplicate from another expense report.”

On the Certify web portal, users also have access to a unique tool that could save companies hundreds and thousands of dollars a year: a mileage calculator. A lot of time, sales teams and service technicians are reimbursed for miles traveled, and just as frequently, these employees overestimate their mileage when including it on an expense report, Neveu says. 

“A user can map their trip, and it will provide the exact mileage and the tool also applies a rate times the federal rate,” Neveu says. “This forces people to be truthful when adding up their mileage rate.”

Neveu says he has seen several companies who have started to use this tool report a significant reduction in mileage claims, which has saved them money. 

Pre-expense report savings

A majority of PMMI Quickie Survey respondents said their employees book their own travel through websites like Expedia and Priceline. But Neveu cautions against this process because companies lose out on major cost savings. 

Because expense reporting happens after the employee has incurred expenses, Neveu says that companies don’t have much leeway or opportunity to cut costs on excessive expenses or on pricey travel itineraries. But companies can spend less when sending teams abroad by implementing a travel planning tool that promotes savings. 

Both Certify and SAP Concur provide its customers a portal to book hoteling, rental cars and airfare, which can promote cost savings. 

“We want to direct people through a single place that prioritizes what is important to the organization in terms of airline or hotel chain partnerships,” SAP Concur’s Bemont says. “It gives an organization flexibility on how they spend, and it also keeps the spend down.”

Because OEMs travel so much, many companies have entered into partnerships with their “preferred” airlines or hotel chains, which can cut the cost of travel quite a bit. And, these expense management platforms can prioritize the airline that is within the OEM’s preferred network when employees are booking trips. For example, if a company has a policy that airfare should not surpass $750, and an employee wants to book a flight on Delta for $600, this trip is technically under policy. However, if the company has a partnership with United Airlines, that same trip might be $300, and will be shown to the employee first when they are booking their trip. 

“The ability to impact your business comes from controlling the spend before it’s actually taken place,” Bemont says.

Aside from saving costs, having a portal where employees can book their travel and have it automatically routed to accounting can alleviate stress that many employees feel when having to book travel on their own or extend lines of personal credit to pay for company trips. 

While PMMI’s survey also found that the majority of respondents said that sales are reimbursed for travel they pay for via an expense report, companies still hand out per diems or cash advances to traveling employees. Cash advances are distributed to try and pre-determine traveling costs and cut out any frills or unnecessary expenses. But this method could also put unnecessary stress on employees, and it’s not exactly the most efficient way to save money, Neveu says. 

“Monitoring cash flow strategically and efficiently is critical, but it’s also about the employees” Neveu says. “Employees on the road can experience a lot of stress around having to file expense reports or put expense flights, hotels or entertainment costs on a personal credit card or paying for them out of their own pocket. In my experience, a lot of small-to medium-sized companies don’t realize this is an issue, and it can really cost them in a big way if their employees are constantly stressed while traveling.”

Time to automate 

OEMs have seen first-hand just how much of a game changer automation can be when it comes to their equipment, and it may not be a bad idea to implement some form of automation into other parts of the business so that every department is operating at the highest efficiency. 

“A lot of these companies in this industry are looking for opportunity to grow,” Bemont says. “One company came to us at a point in time where they only had a few hundred employees, but it wanted to find a way to remove some of the manual work its accounting department did. The company ended up not only automating the entire expense reporting and invoicing process, but the company grew a lot faster. And this new process became a way for the company to manage their growth and improve their processes.”