Auditing expense reports – the top 5 pains
Auditing expense reports can be a real headache unless you use the right expense management solution. Here we walk you through the top pains that auditors struggle with and explain how you can alleviate them.
Manually auditing expenses is stressful
Often businesses don’t take the time to evaluate the way they conduct expense auditing. For many, doing it on spreadsheets is a necessary evil they have to cope with. However, this way of auditing is error-prone and consumes a lot of time and energy.
Often, the auditing is delegated to one person in the finance department who quickly finds herself buried under piles of receipts and expense reports. That person has the unpleasant task of checking expenses and rejecting reports that do not comply with the company policy. At the end of each month the stress level skyrockets, as he or she has to speed up the process because employees expect to be reimbursed swiftly.
To put it simply, a lot of stress and countless hours are wasted on repetitive tasks that could easily be automated.
Not auditing properly is expensive
The old fashioned auditing way means going through a large amount of reports in a short period of time, often at the end of the month. Of course, the person in charge of auditing cannot thoroughly check each expense item so a substantial number of expense reports get “rubber-stamped” without really being reviewed.
This could be very costly to the company as some employees get used to submitting unjustified claims. For instance, we’ve seen people submitting a picture of their dinner in a restaurant to justify the claim, instead of a receipt. Some go even further! (Read our blog article: common frauds and solutions related to expense claims)
The top 5 pains
The issues with reviewing and auditing expense reports manually are:
- Time pressure: Even though one or two persons are in charge of the painful process of checking expenses, CFOs are aware that this time could be used more productively somewhere else.
- Relational problems: No one wants to be the person who rejects expense reports or walks to someone’s desk to tell him that their claims won’t be reimbursed because they didn’t comply with the company rules.
- Unclear rules: many companies do not have an expense policy or maybe have one that is buried somewhere. Because the rules are non-existent or poorly communicated, employees keep repeating the same mistakes. The process becomes frustrating for both auditors and claimants.
- Scalability: as your company grows, the problem becomes acute. It may be OK to have one person managing the expenses of a small organization but at some point, you would need to put in place a process that can scale up smoothly.
- Dissatisfaction: Accountants are highly skilled individuals. They want to be contributing to the success of the company and also be recognized for doing so. Understandably, they can become dissatisfied when they find themselves buried under a stack of receipts and claims. Rather than asking them to double-check each expense, the company may gain more by freeing them from this manual charge and have them focus on high added-value tasks.