Let’s paint a picture. You’re running a bucket race with all your might, focused on reaching the finish line. But you haven’t noticed the tiny holes in your bucket and the water is slipping through, drop by drop. No matter how fast you move, the bucket never stays full. Now think of your business expenses- leaking money without you even realizing it, while you’re busy chasing larger financial goals.
Most finance leaders worry about cash leakage eating away profits silently. Outdated processes, manual approvals, limited visibility, and expenses like inflated travel claims or duplicate vendor payments make it further challenging.
However, with a robust expense management software, you can prevent cash leaks before they drain your bottom line. This blog will explore the biggest blind spots in expense management and how automation can help you get in the driving seat.
The Invisible Drain: Understanding Expense Leakage
Meera is the CFO of a medium-sized pharmaceutical company. While going through the financial reports, she discovered unnoticed and uncontrolled expenses. She noticed that these cash leaks were stemming from:
- Low Visibility into Expenses: She could find out who is spending but not why and how. Due to this, it was challenging to identify and control unnecessary expenses.
- Lesser Control: Outdated approval processes and lack of stringent policies were leading to unauthorized expenses.
- Inefficient Processes and Systems: Managing expenses on spreadsheets or standalone software increased errors, fraud, and inefficiencies.
The Real Cost of Expense Leaks
Shailesh, the CFO of a retail company in Noida discovered an alarming pattern. Since travel was frequent there, unnoticed duplicate submissions and inflated claims were also common. Manual processes and a lack of stringent checks allowed it to happen. When the team summed up the amount of a year, they realized it was enough to fund an entirely new project. When they delved deeper, they found the following culprits behind the cash leakage:
- Fraudulent Claims: Employees submitted inflated or fictitious expenses.
- Manual Processing Errors: Traditional expense management was prone to errors.
- No Real-Time Tracking: Delayed expense reporting resulted in outdated financial data, affecting timely decision-making.
Learn about the 5 common mistakes in expense management that companies commit.
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Shedding Light on the Shadows: Enhancing Visibility into Expenses
For CFOs like Shailesh and Meera, visibility into their expenses is above everything. It allows for:
- Identifying spending patterns and recognizing trends that help forecast and budget more accurately.
- Spotting irregularities early can prevent fraud and unauthorized spending.
- Informed decision-making with access to real-time data.
Manual data entry and paper-based reports do not provide this clarity. It is time-consuming, prone to errors, and lacks real-time insights.
Plugging the Leaks with Automation
A well-designed expense management software like Zaggle that leverages AI can be a great tool in fixing cash leaks. Implementing an expense management software offers:
- Real-Time Tracking: Monitor expenses as they occur to prevent any unwarranted expenses.
- Policy Enforcement: Automated checks ensure compliance with company spending policies to ensure no out-of-policy spending takes place.
- Multi-Level Approvals: Reduce bottlenecks with streamlined multi-level approval workflows.
- Corporate Card: Pay only for legitimate expenses using the corporate card that can be integrated with the mobile app.
- Data-Driven Insights: Get actionable insights from your reports to forecast and prepare optimal budgets.
- Seamless Integration: Controls are much easier to achieve when all your systems are integrated to track expenses in real time.
- Prevent Fraud: When you track expenses in real-time and your policies are already configured, the chances of fraud are much lesser.
Learn more about the benefits of implementing an expense management system.
Expense management software by Zaggle allows companies to control spending by automating policy enforcement, and flagging non-compliant expenses immediately upon submission.
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The Tangible Benefits of Automation
With automation, medium to large-sized companies in pharmaceuticals, manufacturing, retail, hospitality, IT, and telecommunications can:
- Streamline their expense management
- Track expenses in real time
- Gain actionable insights
- Prevent fraud and cash leakage
- Save costs
- Manage expenses on the go with mobile apps
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A Call to Action for CFOs
While Shailesh and Meera are just two examples, CFOs and finance professionals across India suffer from these challenges. Embracing automation and adopting solutions like Zaggle’s Expense Manage System can be a strategic move for medium to large-sized companies. With automation, you can safeguard your company’s profits, enhance operational efficiency, prevent fraud, and curb cash leakage.
