⚡ Get All Content for 20% Off ⚡

Don't Throw Money Away By Not Monitoring Expense Reports (Infographic) In the world of business travel-expense management, small companies are still in the dark ages.

By Bob Neveu

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Once your company gets beyond 10 employees, dealing with expense reports becomes a real hassle. Business owners talk about what a pain it is to get employees to submit expense reports, and accounting must deal with piles of spreadsheets and receipts. Employees spend more than they should, unwittingly or not.

Small companies can benefit by injecting more process and automation into their expense-management practice. Doing so not only can make life easier for the accounting department and employees, but avoids needless overspending and can provide valuable insight into spending patterns that can save money later.

Related: You'll Never Control Expenses If Your Team Doesn't Know What Anything Costs

A recent survey conducted by my firm, Certify, found that at least 20 percent of expenses are in violation of corporate policy. Some companies don't have any policies at all. We're not really talking about employees taking advantage -- even though we do hear about the occasional expensing of unusual items such as hair salon appointments and pajamas. Typically, if there is no policy or the policy is unclear, employees pick the airline, hotel or rental car of their choice -- regardless of price. They might spend $200 on dinner for two, without much thought. All those little extra costs add up quickly.

What's funny is that many small companies today are highly automated in areas such as accounting, HR and sales. In the world of business travel-expense management, however, small companies are still in the dark ages. Our survey showed that 47 percent of small businesses use spreadsheets for expense management, while only 25 percent use web-based systems.

Expense management isn't always viewed as a top business priority for automation. Yet filing reports and getting reimbursed is a real thorn for employees. Nearly 40 percent of employees fail to submit expense reports on time. It's no wonder -- hunting down those receipts and creating individual line items for each one can take hours of a busy work week.

Why should the small-business owner care? For one, an employee that lags behind on filing expenses tends to forget the details of the expense, which can make it tricky for reimbursement if a meal or trip can't be accurately attributed to a client or project. Poor tracking of expenses is just bad business.

Related: 5 Simple Steps to Prevent Expense Fraud

Expense reporting, like other basic business processes, should be easy in today's digital economy. Mobile apps are handling extremely complex tasks -- calculating wind energy or sending alerts when your garage door doesn't close properly. By comparison, creating an expense report is a piece of cake for the average smartphone. Small businesses seem to be catching on that moving away from the heralded spreadsheet of days gone by isn't such a big deal. Our survey showed that within the next 12 months, 54 percent of small businesses will switch to cloud-based expense systems. The typical return on investment is less than 12 months. Another perk: it saves employees time and reduces stress. That's one less problem, right?

Check out the following infographic for more information about how business travelers spend corporate money, and how finance departments manage their expenses.

Click to Enlarge

Don't Throw Money Away By Not Monitoring Expense Reports (Infographic)

Related: 4 Simple Steps for Keeping Every Dollar You've Earned in Your Pocket

Bob Neveu

President and Co-founder of Certify

Bob Neveu is president and co-founder of Certify, the cloud-based expense management software company. Neveu is a serial entrepreneur whose passion is starting and building venture-backed, high-growth, technology-based organizations.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Remote Side Hustle a 43-Year-Old Musician Works on for 1 Hour a Day Earns Nearly $3,000 a Month: 'All From the Comfort of Home'

Sam Ziegler wanted to supplement his income as a professional drummer — then his tech skills and desire to help people came together.

Leadership

Former Interrogator Shares 5 Behaviors Liars Exhibit and How to Handle Them

Five deceptive behaviors to look for and how to respond to those behaviors when you encounter them.

Business News

AI Is Impacting Jobs. Here Are the Gigs Affected the Most, According to an Analysis of 5 Million Upwork Postings

The researcher said in the report that freelance jobs were analyzed first because that market will likely see AI's immediate impact.

Business News

Tesla Paid No Federal Income Taxes Over 5 Years, While Paying Top Execs $2.5 Billion, According to a New Report

Between 2018 and 2022, more than 30 companies paid its top five executives more than they paid in federal income taxes.

Money & Finance

How Stock Market Fluctuations Really Impact Your Business (and How to Thrive Amidst Volatility)

The impact of stock market fluctuations is complex and far-reaching. It doesn't just affect individual investors; its ripple effect impacts businesses everywhere. Here's how.