How to Stop Reimbursing Out-of-Policy Expenses Before They Even Occur

Most Expense Policies Fail for One Main Reason

All companies have expense policies.

And yet, many finance teams have to address overspending, duplicate reimbursements, missing documentation, and other problems every month.

Why?

Since most organizations enforce their policies retrospectively, once the expense has been incurred.

An employee has booked a room in a hotel which is above the limits, submitted a claim and waits for approval. And then the finance team identifies the violation.

By the time the mistake is found, the expense has been incurred already.

The way to stop the problem is not better auditing, but proactive spending management. And here comes modern expense management software that can help you switch from the former to the latter strategy.

The Underestimated Problem of Out-of-Policy Expenses

It’s easy to think that the policy violations are occasional exceptions. But they can actually accumulate to considerable cost leakage. So, for example, the most common expenses of pharmaceutical companies with Medical Representative teams are the following:

• Travel
• Fuel
• Accommodation
• Client meetings
• Conferences
• Local transportation

With many employees submitting expense claims monthly, even minor policy violations can become a costly problem.

There is more to the problem than just numbers.

There is wasted effort by the finance team on exceptions, more approval efforts by the management, and the frustration felt by the employees who have to wait for their reimbursement process to be completed.

Why Traditional Approaches to Expense Review Do No Work

Most companies operate according to the following process:

1. Employee incurs an expense
2. Employee submits an expense claim
3. Manager reviews the claim
4. Finance checks compliance
5. Finance asks for corrections, if needed

The issue here is that compliance checks come at the end of the process.

As a result, finance departments end up wasting valuable time spotting mistakes that could be avoided during claim submission. In addition, some policy violations do not get spotted at all.

Modern expense management software solves this problem with automatic enforcement of company policies before the expense passes through the approval process.

Prevention Is Always Better Than Detection

Let us consider the difference between detecting a policy violation and preventing it.Detection implies identifying a policy violation after the expense claim was submitted.Prevention implies blocking the progress of the claim until it complies with company policies. This will help companies save time and effort on fixing non-compliant expenses by enforcing policies in advance.

How Automated Policy Enforcement Works

Modern software for managing expense reports is capable of verifying the expenses immediately after the submission.

The system checks for:

• Expense limits
• Documentation requirement
• Duplicates
• Wrong categories
• Exceptions

If the expense does not fall under the policy, the employee receives immediate feedback, thus giving him a chance to rectify it.

This guarantees compliance and helps save a lot of time.

Why Strict Control is Required by the Pharmaceutical Companies

Usually, pharmaceutical companies work with huge field force teams, spread across multiple states.

Organizations face issues such as:

• Non-standardized process
• Delayed approvals
• Duplicate reimbursements
• Invisibility
• Violation risks

Use of the automated expense tracking software will help standardize expense processes and keep total control over business spending.

Five Ways to Prevent Expense Leakage

1. Set Automated Spending Limits

Employees need to know if their claims exceed the set limits immediately. Automation will ensure that non-compliant expenses won’t move to next steps.

1. Require Documentation upon Submittal

Lack of receipts is one of the most frequent reasons for delays in reimbursements. An intelligent expense management tool will ensure claims are submittable with all necessary documentation attached.

1. Automate Duplicates Detection

Manual reviews usually overlook duplicates immediately, avoiding accidental double payment.

1. Standardize Approval Workflows

Automated approvals will standardize the claim approval process ensuring consistent and transparent treatment of claims.

1. Have Instant Access to the Information

With the help of a spend management solution, finance heads will be able to monitor expenditures continuously rather than having to wait for reports after the spending took place.

From Expense Tracking to Spend Management

Organizations frequently invest in solutions which allow merely tracking their expenses.

However, this does not mean the expenditure control

Good expense management software will help organizations manage spending behaviour proactively through automated rules and policy enforcement.

The objective goes beyond improving the processing of reimbursement claims. The main goal of such a solution is to ensure that only compliant claims make it through the process.

Criteria to Consider in the Best Expense Tracking App

Organizations searching for the best expense tracking app must take into account features that will prevent policy violations beforehand. They are:

• Automated enforcement of policies
• Receipt validation
• Identification of duplicates
• Expense submission via mobile
• Automated approval process
• Real-time spend analytics

A good business expense software solution must assist finance teams in reducing manual labor while maintaining better control over company expenses.

How Expendesk Prevents Policy Violations

Expendesk is a modern, AI-driven expense management solution that provides businesses with a tool for complete control over employee spend.

As opposed to identifying any violation of rules during the claim submission process, Expendesk controls the policies during the process itself.

With the help of this technology, the company can:

• Prevent non-compliance of any claims
• Minimize manual reviews
• Speed up the reimbursement process
• Increase compliance
• Improve spend visibility

For pharmaceutical organizations that deal with managing a big field force, Expendesk solves expense leakage issues and creates an easier experience both for employees and financial departments.

Most companies concentrate on detecting any violations of the rules.The best companies are those that are able to prevent violations at all.

Using modern expense management software, systems allow organizations to control policies when spending occurs, minimize financial leakage and increase compliance without additional administrative efforts.

The future of expense management doesn’t lie in review of more and more claims. It lies in preventing their submission.