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A matter of months after introducing new expense management procedures for his 220 employees, Mark Siddy, finance manager at Connexions Lincolnshire & Rutland, was starting to think about some of the more sophisticated reporting that he might be able to carry out in the future. Last spring he signed up to a web-based expense management service to replace an inefficient paper-based process, hoping to cut admin costs and improve internal compliance, particularly in handling travel expenses. He expects the system to provide detailed insight into a range of factors, from the effectiveness of travel expense policy to the cost implications of the way that mobile employees are deployed.

A support service for young people, Connexions L&R consists of a network of Personal Advisors working from ten centres around the region. Its employees are scattered across those centres, clocking up significant mileage and a lot of car parking tickets. Prior to implementing a web-based expense management system, Siddy concedes that the organization’s procedures were relatively lax – employees claimed back travel and other expenses on paper forms, an inefficient process that was hard for the finance department to audit, while pressure of work caused some line managers to sign off expense forms without properly checking them.

Since signing up to ‘Expense On Demand’, a hosted service available from Computers In Personnel, that has changed. Employees now enter their expense data directly into the central system through a web browser, and managers are obliged to check off each item individually on the automated system. Items are then sent to the finance department, where further checks might be made before payment details are exported to the payroll system.

One of the benefits of the new system is that the auditing process gets easier as time goes by. Each trip that’s entered is put into a database of regular journeys – if an employee makes a trip at the start of the year and does the same journey six months later, they can access the earlier details online and ensure that mileage calculator is claimed consistently. “The message we’re getting through to them is that if they use the database, their claim will definitely go through,” says Siddy. “There’s nothing in the system that says they have to do it – but they’re very aware that we’re looking at it now.”

In fact, much of the value in this kind of service lies in perception – because employees know that expenses are being more closely monitored, the accuracy of claims is likely to improve. By the autumn, rejections from the finance department at Connexions were running at a rate of around six to seven per cent, mostly coming about when insufficient information was entered on a claim.

Siddy points out that one of the benefits of using a hosted service is that if doesn’t prove cost-effective, Connexions can walk away – the only commitment it’s made is on a month-to-month basis. He adds that the Expense On Demand system is easy-to-use and intuitive, and the only issue it’s encountered concerned Internet speed, which was eased when Connexions upgraded its own connection.

Connexions is generating a significant amount of data for analysis, information that could be used in a variety of ways. From an operational point of view, for example, Siddy’s team would be able to compare different routes taken by Personal Advisors to see which are the most cost-effective, or investigate whether it’s better to buy parking permits in some places rather than individual tickets. At a more strategic level, Connexions might also look at how its advisors are dispersed, seeing whether they’re operating out of the best locations in terms of the cost of travel and associated expenses.

If your company has around 500 employees, you probably already have a human resources department and there is likely some system in place to reimburse employees for company expenses that they take care of. Is there any way to streamline this expense management process so that the experience is better for employees and managers? If you were to look at the expense management system your company currently uses and review it thoroughly, you would probably notice quite a few discrepancies. This is because it can be hard to make sure that all the expense reporting policies are being complied with when expense reporting and processing is handled manually.

Automating the expense reporting process means there will be a lot less paperwork to deal with. The approval process can also be automated based on certain criteria. Limits can be put into the system so that if expenses exceed a certain amount, they will flag a manager to look into that particular employee’s expense reporting habits. Another tedious task that usually occurs with paper-based expense reporting systems is the repetitive inputting of the same data every time a person fills out an expense report. In an automated system, the information just rolls over from expense report to expense report unless there is some significant change in an employee’s personnel information.

Mileage reporting can be a real hassle to plow through, especially if it is not recorded in some systematic manner. An automated system can make approval of mileage a cinch. A manager can put in predefined limits for how much mileage someone can accumulate within a month, or there can be a dollar limit set on the mileage that can be counted in a month. These type of limits reduce expense account fraud and make it easier to explain why changes are made to reimbursement given per mile.

If your company operates at multiple locations, a central, outsourced expenses management system can make it easier to coordinate the expenses of all your locations. Since different locations usually have different expense limits, an automated system allows check processing to happen quickly and means that each location can know what there balance sheet is at the beginning of the new expense period.

A good automated expense management system also allows for the redeployment of those who were formerly back office staff into more productive projects. This is definitely beneficial for a company with a staff of this size because there is probably plenty of untapped growth potential in any given market and instead of having employees plowing through expense numbers, they can look for ways to increase the company’s market share. At the most, managers may occasionally be notified if there is a serious discrepancy in an employee’s expense report as compared to the policies set out by the company.

If you are a mid-size firm you can really benefit from an automated business expenses software; it will result in time savings and cost savings, as well as the reallocation of staff to more productive tasks. Take the steps to experience these benefits within your mid-size firm in the near future.

Expense On Demand Ltd
Abbey House
28-30 Chapel Street
Marlow
SL7 1DD
0870 366 2300