When discussing a company’s financial health, it’s important to consider how a business manages its expenses. It’s a process that can become complex, extremely time-consuming, and particularly susceptible to fraud if it's reliant on a paper-based process.
Adopting a digital expense management tool can greatly improve the expense management process. Even better? Adopting an accounts payable (AP) automation solution with integrated end-to-end expense management. Not only will AP Teams find themselves able to optimize their processes and work smarter instead of harder, they’ll reduce their chance of data-entry errors and minimize their risk of fraud.
In this post, we'll explore why expense automation as part of an AP automation solution is becoming a must-have and not a nice-to-have in today's digital-first environment. We'll suggest some top AP automation solutions that include seamless expense automation and call out some of the key features and benefits of each.
Manual expense management workflows are a nightmare
When a business doesn’t have an automation solution, here’s what a typical expense process looks like:
- Employees document and submit a claim. They often need to use spreadsheets, print and attach paper receipts, and then drop the physical asset at an approver's desk.
- Approvers/Managers verify and validate the items listed and receipts provided.
- Expense forms are either accepted or rejected. If they are rejected, the process must re-start.
- Expense forms are audited for compliance by the Accounting Team to ensure they meet company policy. They must also manually evaluate the submission for possibilities of fraud.
- Reimbursement payments are processed and issued, often by paper check.
- Documents are stored in filing cabinets for auditing purposes. When an audit happens, it is extremely time-consuming to find the related paperwork. Even worse, the team may realize that it was misplaced and is no longer available.
Using a manual expense management workflow is a bad idea, for many reasons.
- It opens the doors for errors. Manually entering and approving expenses, as well as spotting the mistakes can be labor intensive and cause a significant drain on an AP Team's time. Missing or incomplete information can create bottlenecks in the process; not only tying up the approver's schedule but causing long delays in reimbursing legitimate claims. 19% of expense reports hold errors, and each one adds 18 minutes to the process.
- It is extremely vulnerable to fraud, either via duplicated/falsified claims, duplicate submissions made to multiple approvers, or out-of-policy claims. 85% of employees admit to having fabricated expenses, and 5% of those surveyed indicate falsifying information on all of their reports.
The best next step for AP teams? Adopting an AP automation solution that includes integrated expense management.
Why AP Automation Is The Solution
AP automation that provides integrated expense management functionality streamlines the entire process from end-to-end. It reduces the amount of time spent processing claims, decreases the possibility of errors, reduces the potential for fraud, and eliminates the need for paper storage.;
- Here’s how an automated expense management process can work:
An employee submits an expense claim into the AP automation software, through a web browser or a mobile app. This includes attaching photos of receipts. - The software notifies the appropriate approver when a new report is ready to be viewed. All approval notifications or requests for additional information are automated through email and tracked at every step. The report can also be automatically matched against company policy to flag out-of-policy charges without extensive manual reviews.
- Expense reports are either approved or denied, or can be routed automatically through another layer of approval. If the expense is denied, it is automatically routed back to the person who submitted it to correct errors, add additional information, to make the required adjustments; including automated notifications to help move the process along.
- Once the expense report is approved, the payment is automatically synced with the company’s ERP system to ensure all records are up to date and provide greater visibility into a company's cash flow.
a. If the employee paid for it with their own money, the reimbursement is automatically routed to accounting for reimbursement and can leverage electronic payments such as ACH or wire transfer.
b. If the employee paid for it with a corporate credit card, the reimbursement can be automatically applied to the corporate account. - When an audit occurs, any expense claim, including supporting documentation, can quickly and easily be accessed via cloud storage from anywhere, anytime.
What to look for in an AP automation solution
A quality AP automation solution that includes integrated expense management offers benefits like:
- Accessibility: The ability for employees to upload receipts and create expense reports from any location; using a web browser or a mobile app.
- ERP Integration: Automatically sync expense reports with an existing ERP or accounting software, eliminating the risk of double data-entry or manual import/export.
- Digitization: Remove paper documents and receipts from the workflow, eliminating the chance for forged or fraudulent receipts or lost documentation causing bottlenecks during approval. Reduce back-and-forth questions and delays by giving managers online and mobile access to approvals. Ensure ease of review for audit purposes; with the ability to access online records from anytime, anywhere.
- Customized approvals: The ability to route expense reports through specific approval channels, eliminating another common opportunity for fraud, and helping compliance with company expense policies.
- Insight and visibility: Gain insight into employee spending patterns for all departments, locations or legal entities as soon as expenses come in. Easily search and filter the results.
- Automated coding: Set up customized expense receipt categories that map to your GL codes, so coding is automatically completed in the background for your accounting team.
- Analytics: Analytical tools that allow companies to make informed decisions about future spending.
Now that you know what to look for in an ideal AP automation solution to help with expense management, let’s explore some top AP automation solutions that offer integrated expense management for small and medium-sized businesses, and enterprise-size clients.
Top AP Automation Solutions with Seamless Expense Management
Small and Medium-sized Businesses (SMBs): Simplicity and Efficiency
Quadient AP: Quadient AP offers an excellent all-in-one AP automation solution that includes seamless expense management. They offer automated invoice capture, approval workflows, real-time expense tracking, and integration with accounting platforms and ERPs like QuickBooks and Xero. Quadient AP's ease of use and scalability, combined with its ability to manage both vendor payments and employee expenses, makes it an ideal choice for growing businesses.
Tipalti: Tipalti is an AP automation tool with built-in expense management that supports global payments, making it an excellent choice for mid-sized businesses. They offer multi-currency payments, automated tax compliance, expense tracking, and real-time reporting. Tipalti’s global payment support and tax compliance features are ideal for businesses expanding internationally.
Airbase: Airbase is an all-in-one spend management platform that combines AP automation, expense management, and corporate cards. They offer real-time expense tracking, corporate card management, automated vendor payments, and spend controls. Airbase’s straightforward setup and ability to manage both AP and employee expenses through one interface make it a strong option for small businesses looking for efficiency.
Enterprise-Sized Clients: Advanced Features and Global Capabilities
Coupa Enterprise: Coupa’s enterprise solution combines AP, procurement, and expense management with AI-driven insights to support large-scale operations. They offer global compliance, AI-powered spend analysis, multi-currency support, and comprehensive reporting. Coupa’s enterprise edition is designed for global organizations that need real-time insights into all areas of spend.
SAP Concur Enterprise: SAP Concur's enterprise solution offers a fully scalable platform that includes advanced AP automation, travel, and expense management. They offer AI-driven insights, global expense management, multi-currency support, and deep integration with ERP systems. SAP Concur's ability to handle high volumes of data and complex global operations makes it a top choice for large enterprises.
Ready to automate? Quadient AP can help
Adopting an accounts payable system that provides an organization the ability to fully automate its expense process is essential to eliminating fraud and ensuring approved payments adhere to the company's policy. It also reduces the cost and time spent on the process.
In 2024, businesses of all sizes can benefit from a unified solution that combines both AP and expense automation. Whether you’re a small business looking to simplify financial operations, a mid-sized company expanding internationally, or an enterprise with complex global needs, choosing an AP automation tool that includes expense management will streamline your financial processes, save time, and provide greater visibility into your overall spend.
If your business is ready to take the next step toward AP automation, contact Quadient AP today!
