Managing expenses is an integral part of running a business, but it can be challenging to ensure that all expenses are reviewed and approved promptly. Expense approvals, when handled manually, often lead to delays, policy violations, and endless email threads.
However, modern solutions like automation can revolutionize this process, offering efficiency, compliance, and streamlined workflows.
This article explores how to simplify and automate expense approvals while enhancing control.
What Are Expense Approvals?
Expense approvals are a necessary part of the financial process, where submitted expense reports are reviewed to ensure they comply with company policies before reimbursement or payment. This step prevents errors, reduces fraud, and provides oversight on how company resources are being utilized.
An Example of Expense Approvals in the Workplace
Imagine an employee submitted a report for travel expenses, including receipts for accommodation and meals. The report gets forwarded to the manager for approval. If it follows the company’s travel policy, the manager approves it, and finance processes the reimbursement.
But if there’s a violation, like exceeding the meal allowance, the manager sends it back for clarification, triggering delays. This shows the importance of a streamline approval process.
What Types of Business Expenses Need Approvals?
Different businesses may have varying expense categories, but common types of expenses requiring approval include:
- Operational Expenses: These are necessary for the day-to-day functioning of the business.
- Travel and Entertainment Expenses: Often associated with sales and client engagement activities.
- Capital Expenditures: Investments in equipment, property, or large-scale projects.
- Miscellaneous Expenses: Ad-hoc costs that don’t fit into regular categories but still need approval.
Also Read:
- Operating Expenses: The Complete Guide for Businesses
- T&E: Your Complete Guide to Policies, Reimbursements, and Management
How Can Business Credit Card Help with Expense Approvals?
Business credit cards simplify the expense approval process by:
- Streamlining Recurring Expenses: Set up approvals for recurring transactions, reducing manual reviews.
- Reducing Fraud: Credit cards offer built-in fraud protection, which simplifies expense tracking.
- Tracking and Reporting: Automatic categorization of expenses with real-time visibility of transactions.
Differences Between Pre-Approved Expenses and Manual Approvals
- Pre-Approved Expenses: Expenses for certain categories can be pre-approved to avoid bottlenecks.
- Manual Approvals: These are still important for non-recurring or high-value expenses that need extra scrutiny.
Problems in the Manual Expense Approval Process
Manual expense approvals can lead to several issues like:
- Human Error: Manual reviews are prone to mistakes.
- Delays: Approvals often get stuck in email threads, slowing down the process.
- Lack of Transaparency: Employees and managers may not have visibility into where an expense stands in the approval queue.
- Non-Compliance: It’s harder to ensure policy adherence with manual processes.
The Role of Expense Policies in Approvals
Expense policies provide the foundation for expense approvals. These policies set the criteria for acceptable expenses and the approval workflow. Having clear, written guidelines ensures compliance, minimizes disputes, and simplifies the approval process.
Why You Should Automate Expense Approvals
Automating expense approvals provides numerous advantages:
- Speed: Automated systems process approvals faster than manual systems.
- Accuracy: Automation reduces human errors and ensures data consistency.
- Compliance: Automated workflows ensure adherence to company policies by flagging violations.
- Financial Insights: With built-in analytics, companies can identify trends and areas for cost control.
How Fyle Can Help With Expense Approvals
Fyle offers a powerful platform to automate and streamline expense approvals. Here's how:
- Automated Approval Workflows: Fyle allows you to automate approvals across various workflows—sequential, parallel, or project-based. You won’t need to compromise on your existing structure.
- Multi-Org Approvals: Approvers working across multiple entities or subsidiaries can manage all approvals in one centralized place.
- Policy-Driven Approvals: When an expense violates company policy, Fyle automatically routes it to relevant stakeholders for review, based on the severity and hierarchy.
- Audit-Ready Logs: Every change, suggestion, and approval is logged for easy auditing, ensuring compliance and transparency.
- Operational Analytics: Stay informed about roadblocks and inefficiencies with real-time data on approval turnaround times.
- Automated Reminders: Forget the need for manual email chases—Fyle automates reminders for pending approvals.
- Single-Click Approvals: Approve expenses with one click from the mobile app, inbox, or even through Slack for ultimate convenience.
- Centralized Action: No need to dig through your inbox—Fyle gathers all approvals in one place, ready for action when you're available.
- Delegation for Approvers: Going on vacation or have too much on your plate? Delegate approval access to a colleague to avoid bottlenecks.
Fyle’s system also ensures that approvers aren’t pulled into the process unless their attention is absolutely necessary, keeping things moving smoothly without unnecessary holdups.
In Conclusion
Expense approvals don’t have to be a bottleneck in your organization. By automating the process, you can eliminate delays, reduce errors, and enhance compliance.
Solutions like Fyle offer seamless integration with your existing accounting software, real-time transaction data on your business credit cards, receipt submissions via text messages and other features that simplify approvals for finance teams, approvers, and employees alike.
Don’t let expense approvals slow your business down—check out Fyle today and experience the difference automation can make.
