Best Practices of Automating Expense Claims

Proper tracking of a business’ expenses is critical to that organization’s success. Additionally, as that business grows, performing the expense claims process by hand will not only become time-consuming but also very expensive.

Approximately 70% of best-in-class in enterprises are using one of the four automated methods for expense management: an end-to-end solution, ERP provider, expense management software or outsourcing, according to an Aberdeen Group study.

Naturally, the results of automating expense claim processes can be significant. While enterprises using fully automated processes are seeing a cost of $15 per report on average, those using manual systems spend, on average, more than double ($31 per expense report).

Like many individuals, I must submit expense claims as they require approval and reimbursement of money I’ve spent for business purposes. These claims are in the form of receipts, acting as proof of what, how much, and where it was spent.

My expenses may include business trip accommodations, professional subscriptions, telephone and internet provider, client entertainment, and equipment/software. And, of course, the bigger the company, the more expense claims will have to be processed, and, if done manually, the more time this will take.

How a manual expense claims process works 

Before automation entered the picture, expense management would usually take the form of physical stacks of paperwork and digital stacks of Excel sheets. Managing them required numerous employee hours. Despite this labor-intensive approach, however, expenses could still end up inaccurate, out of date and costly.

A typical manual process for expense claims might work like this:

  • An employee completes a paper expense report, or fills an Excel spreadsheet, and forwards it and relevant receipts or invoices to his/her manager.
  • The manager approves and sends the expense claim to the accounts department
  • Accounting processes each expense item into the company finance system before filing it

When this manual process must be done for every $5 footlong bought in a company of 20,000 employees, you can see how it can quickly become a frustratingly drawn-out process.

It is easy to see how automating the expense claim process can benefit workers. Removing the manual processes reduces the stress – I don’t have to fill out the same expense claim for the 20th time, and it doesn’t have to get processed by finance for the 20th time, either. 

study conducted by the Aberdeen Group revealed that automating this expense management process – the creation, submission and reimbursement – topped the list of actions for improving expense management.The results of an Aberdeen Group study on expense claims management.

Challenges of manual expense management 

Remote workers 

The latest telecommuting statistics show that regular work-at-home among the non-self-employed has risen by 103% since 2005. Also, as of 2014, roughly 3.7 million people (2.5% of the U.S workforce) work from home at least half the time. Employees are more likely to claim expenses if their home is their permanent place of work because they can claim expenses for lunch and work-related travel. As someone who falls into this category, I know that my receipts must travel the distance as well – and will take longer to get to company offices and could get lost.

Long reimbursement cycle 

Manual reimbursement cycles are long and drawn out. This is especially true in large companies, where employees have to process large volumes of expense claims. The frustration that may result from a long, monotonous task such as this can result in errors as employees go on ”auto-pilot.” Despite the fact that the term was coined for machines, you can avoid this issue by automating the process.

A duplicate process 

Employees are able to collect receipts and submit them together, but duplicate processes can’t be performed. If I have to get in a cab to go to a meeting every Monday, the same form will have to be filed every month. An automated workflow process saves me this processing hassle, and ultimately saves the business time and money, too! 

Best practices using Nintex to automate expense claims 

Presumably, you have a SharePoint or SharePoint Online site where you are able to create lists and libraries. From there, you’ll need to create a list for company expense claims. This means any time that an employee files a form, it will be registered and part of this list. Once an employee electronically submits a new expense form, the workflow begins.

1. Use the Send Email action 

Once an employee fills out a new expense claim, an automated email acknowledging the recipient’s form submission. Oddly enough, people like to know what is going on when it comes to a process they are participating in.

In NINTEX: Use the Send Email action in Nintex Workflow to contact the employee submitting the expense claim. You’ll need to make sure the employee name is part of the list item, then configure the action to find this data in the current item.

2.  Use the Update List Item action 

The workflow updates the list item and informs the site administrator of the change.

In NINTEX: Use the Update List Item action in Nintex Workflow to update the new expense claim on expense claims list. Having a status column works really well here, and Nintex can very easily update this field throughout the expense lifecycle.

Use the Send Email action to notify the manager to review the new expense claim. Nintex can interrogate Active Directory (AD) to find the relevant email if your systems are setup in this way.

3.  Use Conditional Branch action  

Once a manager is aware of the new update, he or she reviews the expense claim for approval. If approved, the expense claim is forwarded to the Finance department. If not, it’s returned to the employee to reevaluate (reverting to step 1.)

In NINTEX: Use Conditional Branch action to set ‘Yes’ and ‘No’ branches – re: has the expense claim been approved? If ‘Yes’, use Update List Item action and use Assign a task action to send an expense claim to the Finance department for approval; If ‘No’, use Send Email action to notify the employee the claim has been unsuccessful and convey the options.

 4.  Use the Assign a Task action 

Once a claim is validated, a notification is sent to the Finance department to process the claim. Here the expense is reimbursed and the money is transferred to the employee.
In NINTEX: Use the Assign a task action to prompt the Finance department to process the claim.

 5.  Use the Create List Item action  

Once processed, the reimbursement is entered into the records to keep track of each expense claim. The stakeholders (i.e. the employee making the claim and their line manager/team leader) are notified of the expense claim.

In NINTEX: You could very easily have a separate list to manage payments. Using the Create List item action, you can easily create a payment and even link it back to the relevant original expense submission.

Conceptually, this sample workflow provides a “skeleton” for you to use when automating your expense claim process. It’s worth pointing out that, every business is different, and some of the steps in this workflow will vary from one company to another.

Plus, your business may have other systems that the expense claim metadata needs to be transferred to or reconciled against, which Nintex can do with ease. However, the basic logic described earlier can be applied in most scenarios, and will provide a solid foundation for automating your expense claim procedure.

 

Stay tuned as we’ll be publishing more in our Nintex Workflow best practices series, including template builders for employee onboarding and customer service response processing.

Bookmark the Nintex Blog, and keep visiting for useful tips and best practices!

 

Brad Orluk

Brad has been evangelizing technology and process automation for over 15 years. Prior to joining Nintex, he had roles in infrastructure, IT consulting, and most recently, as an Information Architect at a Fortune 500, where he worked on business and IT process improvement and automation on a variety of real world global projects and productivity initiatives. Brad’s unique, technical yet business focused, background gives him the ability to help users leverage technology to drive value to their businesses. Follow Brad on Twitter @BradOrluk