The Hidden Price of Manual Expense Approvals (And What It’s Actually Costing You)

The True Cost of Manual Expense Approvals

Almost every organization knows that manual expense approvals are inefficient. What most of them fall to see, though, is the true price tag attached to such archaic methods.

In the case of pharmaceutical business, whose teams frequently travel, spend money on fuel reimbursements, etc., there are plenty of hidden costs associated with manual expense processes. Slow approvals, frustrated employees, finance bottleneck, regulatory risks, and poor spending visibility may significantly harm a business’ bottom line and efficiency.

That is where automated expense management software steps in:

The Price of Manager Approval Bottlenecks

All expense claims must be reviewed, verified, and approved. Managers who use manual processes waste lots of time every week checking receipts, making sure that everything complies with corporate policies, and replying to their employees’ requests.

Research shows that organizations which use manual expense management workflow spend up to 3 times more time on approvals than those with automated solutions.

Let’s consider a mid-sized pharmaceutical company that has:

• 200 employees
• 75 Medical Representatives (MRs)
• 500+ monthly expense claims
• Multiple regional managers making approvals

Assuming that it takes 5 minutes to approve one expense claim, managers may lose more than 40 hours of their work a month due to expense claims handling.

This is equivalent to one whole workweek spent on purely administrative activities that could be easily automated with an advanced expense management system.

Delayed Reimbursements Decrease Employee Morale

Employee satisfaction is directly influenced by reimbursement process, especially those of the field teams.

Medical Representatives spend their own money on:

• Travel expenses
• Fuel costs
• Accommodations
• Visiting clients
• Transportation
• Marketing activities in the field

Delaying reimbursement processes means that employees finance organizational operations at their own expense.

According to the research about 72% of employees become annoyed with delays in their reimbursements.

Delayed reimbursements result in:

• Lower level of employee engagement
• Poorer productivity
• Increase in complaints to HR and financial teams
• Higher level of employee turnover
• Poor field-force morale

The automatic expense management app speeds up the process of claim approval and increases reimbursements thus improving employee satisfaction and trust.

The Hidden Productivity Costs That Finance Teams Can’t Afford to Overlook

Manual expense management consumes significant hidden labor on the part of finance teams.

Finance employees spend hours each week:

• Verifying receipts
• Checking expense policies
• Spotting duplicate claims
• Reconciling spreadsheets
• Following up with managers
• Reimbursing expenses

Rather than focusing on strategic financial planning, finance teams get bogged down in routine tasks.

With expense report software, however, claim verification, approval routing, and reimbursement processes are automated, freeing finance teams from menial tasks.

Compliance Risks Increases with Each Spreadsheet

Pharmaceutical organizations run in highly regulated environments where precision in document management matters.

Using manual approval system increases risks of:

• Missing receipts
• Policy violations
• Duplicate reimbursements
• Reporting inaccuracies
• Audit Risks

Due to lack of centralized monitoring, companies find it hard to achieve compliance across all regions and divisions.

Centralized business expense software allows you to monitor every single transaction and implement policies automatically.

Lack of Spend Visibility Hinders Smart Business Decisions

Organizations find out about the problem of overspending only when their monthly reports are ready.

By that time, overspending has already occurred.

Approval by manual process is causing difficulties answering such questions as follows:

• What are the costliest regions when it comes to travel expenses?
• Do some teams exceed the limits of reimbursement?
• Is there an increase in the price of fuel?
• In which category of expenses do we require optimization?

Modern spend management software that are modern provide real-time analysis and dashboards to help financial executives in decision-making prior to expenses getting out of control.

The Cost of Expense Fraud and Duplicate Claims

Expense fraud is still a major issue for organizations with large field forces.

Problems that arise in the manual process:

• Duplicate submissions
• Overclaimed mileage amounts
• Modified receipt images
• Exceptions without proper authorization

Manual expense tracking struggles with detecting these problems because managers are simply overwhelmed with work.

Modern expense tracking software automates and verifies expense claims using machine learning and artificial intelligence.

Why Pharmaceutical Companies Have It Worse

Pharmaceutical organizations are the most affected by expense management problems.

The reason is that Medical Representatives cause many expense related to:

• Fuel reimbursements
• Hotel accommodation
• Travel between cities
• Doctor visits
• Sales promotion
• Regional events

With operations spanning different states, it becomes extremely hard for finance teams to keep things consistent and visible.

As businesses expand, managing manual approvals becomes even harder.

Using the best expense management software, companies will be able to automate the whole process of approvals, get faster reimbursements, and have full control over their field force spending.

What Is Automated Expense Management?

Modern software eliminates the issues associated with manual approvals, making things such as:

• Automated Expense Reporting

Submitting claims happens instantly using a convenient mobile-friendly expense management app.

• Workflow Automation

The workflow for approval of claims is automated and sent to managers based on pre-set rules.

• Real-Time Visibility into Spending

Having access to dashboards provided by expense tracking software, finance teams can track all expenses.

• Faster Reimbursements

Having automated approvals makes the process of getting reimbursements much faster.

• Policy Compliance Controls

Every approved expense must be compliant with the company policies first.

• Actionable Reports and Insights

Modern tools provide advanced reporting features to optimize the whole business spending.

Things to Look For When Picking the Best Expense Tracking Software

Pharmaceutical companies will want to ensure that the best expense tracking app they choose offers the following features:

• Mobile submission of expenses
• Scanning of receipts
• Workflow approval processes
• Reimbursement process tracking
• Controls to ensure compliance
• Real-time dashboards
• Automated expense verification using AI technology
• Integration capabilities

An effective expense tracking software offers functionality of both expense report softwar and spend management software systems.

How Expendesk Can Help You Get Rid of Hidden Expenses Related to Expense Approvals

Expendesk is an AI-powered expense management software designed to give control over expenditure to SMEs and mid-market enterprises.

For pharmaceutical companies that have to manage Medical Representatives’ travel and expenses, Expendesk offers the following advantages:

• Automated expense approvals
• Faster reimbursements for employees
• Lighter workload for the finance department
• Better policy compliance
• Elimination of manual tracking of expenses
• Visibility of spend in real times
• Detection of duplicate and fraudulent claims

Rather than spending valuable time chasing expense approvals, companies will be able to focus on growth and efficient operations.

Not only does manual expense approval process waste time, but also incur costs, which affect efficiency, employee morale, compliance and profits.

In the case of pharmaceutical companies dealing with hundreds of expense reimbursements each month, such hidden costs may turn into a serious headache for business.

Use of contemporary expense management software cannot be considered as an option anymore, as those organizations who automate their processes can achieve significant improvements in approval speed, employee experience, compliance and full visibility into expenses.

The issue of hidden costs associated with manual expense approval is not about whether you incur these costs. It is about how long can you afford to keep incurring them.