Research shows that 41% of businesses are unable to complete the monthly close process within six business days — making for a stressful end to every month and consistently deprioritizing strategic projects like financial planning, budgeting, forecasting and performance reporting.
Inefficient manual processes contribute to these lengthy closing timelines and absorb valuable hours from finance and accounting.
Managing travel and expenses using manual tools like Excel, for example, creates unnecessary opportunities for error that slow the financial close. The Global Business Travel Association found that companies process around 51,000 expense reports and spend on average 3,000 hours correcting errors each year. That’s 3,000 hours of squandered overhead just within the finance and admin teams.
Businesses can no longer afford to manually hunt for missing expense reports, missing receipts and incomplete or erroneous data.
“Any errors or inconsistencies in the expense reconciliation process can lead to potential audits or compliance/regulatory headaches for companies,” says Kalyan Vissa, Head of Product at TravelBank. “That’s why it’s critical for travel and expense management solutions to ensure there’s a high degree of accuracy and transparency in the expense reconciliation process.”
However, ensuring a high degree of accuracy and transparency is easier said than done. To speed up expense reconciliation — and, in turn, the financial close — companies need to ditch manual processes and embrace solutions that make managing travel and expenses faster and easier.
Integration with AP and ERP solutions
Seamless integrations across various financial systems are integral to enhancing the financial close.
“Robust and simple-to-set-up integrations with the most commonly used AP/ERP solutions help speed up the financial close,” says Vissa. “In addition, users should be able to download detailed and comprehensive expense and spend transaction reports to aid in the reconciliation process.”
When expense reports are reflected in a company’s business accounting software (and other systems) in real-time, accounting teams can more easily stay up to date with company spend. And when a company’s travel and expense management solution system syncs with its general ledger, it lessens the accounting team’s workload.
For example, because reconciliation is especially difficult for accounting teams when expenses aren’t categorized in alignment with the categories in their general ledgers, companies can maximize efficiency by ensuring their administrative users can create categories for employees to select from — enabling easier mapping to the proper general ledger expense accounts.
Automated expense reports
Companies’ accounting teams’ time is valuable, and it shouldn’t be spent chasing down employees to create or submit their expense reports. However, with 68% of workers reporting spending 30 minutes to two hours completing expense reports each month, it’s not easy to get employees to set aside the necessary time to gather and submit their receipts.
Using an all-in-one platform capable of auto-generating expense reports enables companies to shorten expense reporting timelines. That way, all receipts and expenses are automatically added to employees’ expense reports for travel booked through that platform — reducing delays in report creation and submission.
Synced transactions and OCR
Companies can also streamline report creation processes — and drastically reduce errors — by using a solution capable of easily capturing expenses.
With an integrated mobile expense app, for example, employees can snap a photo of their receipt and send details digitally. OCR (Optical Character Recognition) technology pre-scans photo-captured receipts and categorizes employees’ expenses appropriately, helping reduce the potential for lost receipts or mis-submitted expenses to hold up reimbursements. The benefits are extended when credit card sync technology pairs employees’ transactions with their receipt photos
These capabilities reduce the risk of fraud and abuse in the travel and expense process while taking opportunities for human errors and omissions out of the expense reporting process. (Historically, 19% of expense reports contain errors or missing information — costing companies an additional $52 and 18 minutes to correct each expense report.)
Automated approval flows
Once expenses are submitted, having an automated expense-report approval flow can help companies review reports in a more timely manner.
A modern travel and expense management solution should notify approvers of submitted reports, for example, and enable them to review and approve or reject reports from any device — with employees auto-notified that approvers have taken action. In the event a report needs to be rejected, approvers should be able to add comments detailing why.
Conclusion: A modern solution for a better process
Achieving streamlined bookkeeping requires companies to use solutions that make financial close processes — such as expense reconciliation — faster and easier. By leveraging the real-time data and automation capabilities of an all-in-one travel and expense management solution, companies can lessen errors and inefficiencies in the financial close while driving up accuracy and transparency.
TravelBank is the only expense and travel management company that can offer a complete, end-to-end solution that syncs with any card. Learn more at travelbank.com.