Build an Automated Expense Management Process
Sr. Product Marketing Manager, Content
Table of Contents
Efficient expense management is crucial in the complex world of finance. A seamless expense management process not only refines financial operations but also strengthens the basis for solid financial health and business expansion. Finance and accounting professionals often struggle with the dual challenges of manual processes and system fragmentation – adversely impacting operational efficiency and posing significant risks to compliance and financial stability.
Studies indicate that 75% of finance professionals’ accounting processes are manual. With vulnerability to human error, manual processes create discrepancies and delays in expense reporting and approval workflows. One data entry mistake can proliferate to dozens of spreadsheets, and a lack of audit capabilities increases compliance risks. Manual processes result in inefficiencies and mistakes that cost companies up to 30% of their annual profits.
Here, we’ll discuss several expense management challenges and offer strategies for building an automated expense management process. We’ll showcase a video demonstration that guides you from expense submission to reimbursement, highlighting the automation achieved by integrating financial applications.
Challenges with Expense Management
System Fragmentation and Data Silos
Organizations often experience system fragmentation in expense management. This happens when they use several disconnected systems to manage and track expenses, unintentionally creating isolated data pockets or “data silos.”
The fragmentation of finance and accounting systems restricts visibility into spending and hinders the seamless flow of financial data across various platforms and departments. For example, many companies use Concur for travel expenses and Expensify for corporate credit cards. These disconnected systems can create data silos, obstruct financial information flow across the organization, and prevent a unified view of expense data.
Alarmingly, 69% of surveyed finance and accounting professionals stated they are struggling with system fragmentation, making it difficult to get a complete view of financial data. Data silos limit the real-time availability of crucial financial data and create an environment where discrepancies and inconsistencies can grow.
Another major challenge finance professionals face is the prevalence of fraud within expense management. According to a report by the Association of Certified Fraud Examiners, 5% of annual revenue in American companies is lost due to fraud, with 15% occurring within expense management.
When financial data resides in data silos, it obstructs a comprehensive view and oversight of the entire financial landscape of an organization. This lack of transparency and limited access to complete data can create opportunities for fraudulent activities to go undetected.
System fragmentation negatively affects decision-making and compliance, two key pillars that protect an organization’s financial integrity. Fragmented systems often leave decision-makers sifting through a maze of disparate data, struggling to understand the organization’s financial health. This lack of consolidated data can lead to uninformed and potentially harmful decisions. Moreover, ensuring compliance becomes a complex, error-prone task, especially in sectors where adhering to financial regulations is crucial.
Maintaining accurate and consistent financial reporting across various isolated systems demands a detailed and labor-intensive approach. This complexity exposes the organization to potential risks, especially regarding adherence to regulatory norms, due to the heightened possibility of oversight or error in manual data handling across multiple platforms.
Manual Processes and Reporting
According to a recent report, 43% of companies rely on manual expense reporting processes. With its multi-step, detail-oriented nature, manual reporting consumes time and shifts resources from strategic to operational tasks. The potential for errors is significant, risking the accuracy of financial reports and subsequent decision-making.
The inefficiencies of manual processes emphasize the urgent need for finance and accounting application integration and automation. Integration seamlessly connects various systems, enhancing data accuracy and enabling real-time reporting. It minimizes error risks, saves time on data management, and ensures the utilization of current, accurate data in decision-making.
Building a Frictionless Expense Management Process
Building a frictionless expense management process requires leveraging finance and accounting application integration, which connects disparate systems and automates workflows, eliminating manual data entry. Once finance applications (and systems) are integrated, teams can create an automation roadmap.
With an integration platform as a service (iPaaS), organizations can integrate various expense management systems, such as Concur and Coupa, and begin automating financial expense processes. This eliminates the fragmentation of systems and provides a single source of truth for expense data.
Finance professionals can easily pull data from different systems and comprehensively view expenses, enabling better cost control and decision-making.
In this video demo, we’ll build an automated expense management process by creating integrations within a finance tech stack.
Streamline Processes with Automation
By automating the expense management process, Celigo helps organizations reduce processing time and eliminate manual errors. Expense reports can be automatically generated, approved, and reimbursed, ensuring timely and accurate employee payments. This not only improves efficiency but also enhances employee satisfaction and engagement.
Real-time Reporting and Analytics
Celigo’s integration platform provides real-time reporting and analytics capabilities, allowing finance professionals to gain insights into expense trends, patterns, and anomalies. This enables proactive decision-making and helps identify cost savings and process improvement areas. With accurate and up-to-date data, organizations can make informed financial decisions and drive business growth.
Managing expenses efficiently is crucial for the success of any organization. Organizations can build a frictionless expense management process, addressing the challenges of fraud, system fragmentation, and manual reporting.
Celigo’s integration platform offers a comprehensive solution to integrate various financial and accounting applications to automate and streamline the expense management process.
To learn more, check out our webinar, The Five Elements of Finance Automation.
We’ll discuss how automation eliminates the inefficiencies caused by fragmented finance systems and manual workarounds. With a streamlined financial close process, you can improve accuracy and enable real-time insights for more informed decision-making.
Let us support you on this journey.
Where are you in your automation journey? Let’s find out.