As a startup or small business, you might think you’re saving costs by managing your expenses manually. Your team are probably used to wearing multiple hats and the idea of investing in tech might seem like an added expense for your business.
In reality, manually processing expense claims can be a bigger drain on your resources than you might realise. Typically, manual expense management is slow, distracts your team from more strategic work, opens up vulnerabilities in your business and is prone to errors.
From lost receipts to duplicate reports and slow reimbursement cycles, handling expenses manually can hurt your bottom line and stop you from taking that next step with confidence.
Instead, it’s worth investing in the right expense management platform that can take manual tasks off your team’s plate, give you greater visibility over your expenses and help lower the chance of expense fraud, human error and employee dissatisfaction.
Still not convinced? Let’s run you through four hidden costs of manual expense management and how to avoid them.
Inflated expense claims, mischaracterised expenses and duplicate claims are just some of the risks your business is open to when you’re managing your expenses manually.
The research tells us that businesses lose an average of 5% of their revenue to fraud annually. Without a robust system that can flag duplicate claims and automatically matches purchases with receipts, it’s easy for expense fraud to fly under the radar for weeks if not months.
That’s why an expense management platform (like Cape) is one of the most effective ways to more than halve losses due to fraud and detect expense fraud 50% faster. With Cape, you can track transactions as they happen so there is no end of month surprises.
Even the best team members don’t get it right all the time. But when it comes to expense management, even small slip-ups or mistakes can mount up over time and impact your bottom line.
Some of the common issues and errors that can crop up with manual expense management include:
But with an expense management platform like Cape you can say goodbye to expense reports and ditch the chance of human error, too. You’ll score preloaded team cards with in-built expense policy rules so no payments need to be explained. That means you’ll never worry about overspending and can let our software do the work of enforcing your policies (even down to reminding cardholders to submit receipts).
Forcing your employees to pay for work expenses out of their back pocket is one of the most overlooked costs of manual expense management. In fact, a study on worker attitudes towards expense reports found that a whopping 62% of employees view the manual experience as slow and frustrating.
Why? Well, filling out tedious paperwork and manually lodging reports can be more effort than their worth (especially for small expenses). Plus, waiting weeks or even months to get reimbursed can stop your team from booking meetings or securing the tools they need to work at their best.
Instead, prepaid expense cards give your team the ability to make work-related purchases when they need to (without footing the bill themselves). Plus, it reduces the manual work for all involved and gives you more control and visibility over where your business’s money is going.
Whether you’re dealing with spreadsheets or paper files, manually managing expenses stops you from having the visibility you need to prevent fraud, boost your savings and increase your business profits.
The costs of redundant subscriptions, non-compliant expenses and duplicate claims can easily add up and mean you’re spending more than you need to on things that aren’t adding value to your business.
Instead, an expense management platform like Cape can help you ditch outdated manual processes and score visibility over all of your expenses in a few clicks. With real-time notifications and the ability to review activity down to the individual virtual card, you’ll be on the front foot when it comes to what’s been spent.
Plus, you’ll be able to act fast to immediately stop fraud and free up your team’s resources to focus on more strategic work to drive your business forward.
Ultimately, manual expense management drains the resources of your biggest asset: your finance team. Instead, an expense management platform like Cape helps your crunch numbers less and boost business more by reimagining your entire expense workflows.