Complete Guide to Automated Expense Reporting

As your business grows you might decide it's time to look at automated expense reporting to help optimise your business spending and cut out unnecessary admin and costs. Using expense report automation tools can make it easier to see business spending overall, by category, by team or individual, giving you insights into how costs may be reduced, and productivity improved.

Join us as we walk through the basics of expense automation. We’ll also introduce Wise Business, which offers the Wise card to help manage employee spending across  currencies, with the mid-market exchange rate and low, transparent fees.

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What is automated expense reporting?

Automated expense reporting offers a complete spend management solution for businesses, which can help save time and money, avoiding duplication or repetition of costs and optimising business spending.

Automated expense reporting aims to bring together employee expenses, employee business travel and invoicing, to give finance teams better insights into employee initiated expenses, such as travel costs, accommodation during business travel, subscriptions and invoice payment. 

By making it easy for employees to report spending - and for management and finance teams to view and monitor it - businesses can cut down unnecessary or unauthorised costs. It’s also good for employees, streamlining the expense management system so they get reimbursed more quickly for out of pocket spending on behalf of the business.

The features which come with any automated expense reporting system can vary depending on the customer niche and the focus of the provider, but can include:

• Invoice processing and accounts payable
• Project expense monitoring and management
• Subscription management and digital advertising
• Expense management including business travel and team perks
• Business debit and expense cards

Let’s walk through why you may choose to automate expense reports - we’ll also take a look at some options to consider later.

How does expense report automation work?

Expense report automation may apply to out of pocket spending, or other employee initiated spending like contracting with a new supplier. The process for expense report automation will look a little different in each case, but as a broad outline, the steps will be the same.

Let’s walk through the steps that may exist for employee out of pocket expense management and approvals, in a business which has implemented expense report automation:

1. Receipt/invoice capture - once the employee has spent on behalf of the business, they’ll take a photo of the receipt or invoice as evidence of spend, and upload it to the expense management platform or app with a description.
2. Analysis and management approval - the software can automatically check if the spend is within company policy, and forward it to the manager to manually approve if needed.
3. Finance approval and processing - spending from across the business is aggregated into a report for finance to complete final approvals and automate employee reimbursement where needed.
4. Accounting reconciliation - expenses are synced with the accounting software the company uses, to keep the records straight and provide an audit trail.

Automated expense reporting benefits

There are many benefits of automating expense reporting which can vary depending on the type of spending and the size and structure of your business. Different providers also offer unique tools which can offer their own perks suited to different customer needs. Here are a few of the benefits of automated expense systems:

• Management can set policies and spend control at individual or team level
• Management and finance can view and monitor spend across the business more conveniently
• Expense process is easier and less time consuming for employee, management and finance team
• Less chance for human errors to creep into the expense process
• Employees spending out of pocket could be reimbursed quicker
• Breaches of company spending policy can be quickly picked up and prevented
• Oversight allows for an easier view of ways to address inefficient or duplicated spending, such as improving supplier negotiations or SaaS licenses

Automated expense reporting system

There are plenty of great tools and providers available in the UK that help with automating expense reports. Services do vary quite significantly, with different providers catering for their own customer niches.

Some you might want to consider include:

Spendesk¹ - view all spending across employee expense, project costs, procurement, marketing, digital spend, and more, in one place, to make it easier to manage liquidity and cash flow. Issue employee cards to streamline the expense process for both the employee and the management.

Concur² - tool from finance giant SAP, which covers end to end requirements from writing an expense policy, travel and employee initiated invoicing, through to creating the tools to make the process simple for all. SAP works with large global businesses and organisations to help reduce reliance on manual processing and paperwork.

Expensify³ - Spend and travel management tools, including receipt tracking, bill pay and invoices, and company cards to make spending easier for employees. Integrates with many other popular business and finance apps for convenience.

Payhawk⁴ - Issue physical and digital corporate cards which offer multi-currency functions across some common currencies, set card spend policies and controls, to manage and automate expense claims - options also available for large businesses including accounts payable support and supplier management.

Pleo⁵ - Physical, temporary, virtual and vendor cards, invoice management processes and employee reimbursement options to make it easier and frictionless to manage company expenses and spending.

How to automate expense reports

If it’s time for your business to embrace automated expense reporting, take a look at this step-by-step guide on how to implement automated expense reports as a UK business.

1. Research and select the right automated expense report tool for your needs - we’ve highlighted a few options here, but there are many different providers in the UK, and each company will have its own unique needs. This will mean that doing your homework to pick the best option for you is essential.
2. Check over, update and upload your expense management policy - your automated expense management tool needs guidelines - your expense management policy. Make sure you have an employee expense and spending policy which is fit for purpose - some software providers offer templates to help you build this out if you don’t have an up to date policy live.
3. Consider issuing employee cards for spending and withdrawals - many expense reporting providers offer ways to issue employee debit and expense cards which can make it easier to manage business spend, as well as offering benefits for employees who would otherwise have to spend out of pocket. You can even get Wise Business expense cards that allow your team to spend across currencies with no exchange rate mark up.
4. Set up approval workflows - once you’ve agreed on your expense policies, you need to think about workflows for approvals. Some expense reporting tools will offer many automatic approval options, but in most cases you’ll also want to involve management or your finance teams, at least for high ticket spending
5. Sync expense spending with your business finances through integrations - the final step is to make sure your new automated expense reporting system knits into your business finance processes seamlessly. Pick a provider which offers integration with your accounting software for example, to keep all your books in line.

FAQs - automated expense reporting

What is the expense management workflow?

The expense management workflow is the step by step process of managing an expense, from spending, receipt capture and approval, through to reimbursement and reporting. Within this workflow there will be checks and balances such as a policy about what spend is allowed, and automated and manual approval steps to make sure no unauthorised spending is allowed to slip through the net.

How does automated expense reporting differ from traditional manual reporting?

Automated expense reporting can take a lot of the manual administration out of the expense reporting and management process. Software can be used to allow employees to record and evidence spending, which is then categorised, approved and reported accurately, allowing for quick reimbursements for the employee, and less admin for everyone.

Can automated expense reporting tools be integrated with accounting software?

Yes. Often expense reporting tools can be integrated with popular cloud accounting solutions to make the end to end process of expense management easier. 

Improve efficiency with Wise Business expense cards

If you’re managing business spending across different currencies, Wise Business expense cards can be a great tool to use alongside your preferred automated expense reporting system.

Wise Business offers powerful international accounts which support currencies, and which you can use to issue physical and virtual employee and expense cards to make spending and withdrawals easier. Wise always uses the mid-market exchange rate with low fees for foreign currency spending, with no foreign transaction fees to pay - which can make this a very cheap and convenient option if your team needs to spend overseas or in foreign currencies on behalf of your business.

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Using an automated expense reporting system can mean expense management is easier, cheaper, and less prone to human error. Expense automation removes a lot of the admin burden of the process, and also allows for easier overview and insights into spending which is useful to eliminate unnecessary or unauthorised spend. Use this guide to automated expense reporting to see if it’s right for your business - and take a look at the Wise card if you’re managing company spending across currencies.

Sources used in this article:

Sources last checked December 13, 2024