What if you could track employee expenses more proactively? With a pre-approval solution, you can track expenses and automatically enforce policy before expenses are incurred. You can ensure employee expenses are compliant with a rules-driven workflow, which helps you avoid extra expenses.
Let us look at the key components of an expense pre-approval process and how to improve your overall expense management system.
Why are pre-approvals essential?
A pre-approval process is important as it allows an employee to create a report and apply for expenses prior to travelling on a business trip, allowing them to avoid paying out of their own pockets. To ensure that funds are available for a trip, an employee must complete a pre-approval form outlining the expense requested, estimated cost, and period of the vacation plans.
Employees in companies without a pre-approval process must pay for expenses out of their own pockets and then apply for reimbursement from the company. Using digitized pre-approvals ensures that employees have access to the funds of the company before making a purchase. Approving expenses in advance not only eliminates employee frustration of waiting for reimbursement, but it also makes it easier for the accounts team to monitor expenses more proficiently.
Developing A Strategic Pre-Approval Process
There are several fundamentals to create a streamlined and effective pre-approval process:
Expense Requests Managed Efficiently
Making it simple for employees to enter expenses is the first step in an effective pre-approval process. This is handled as part of the solution by automated expense management software such as Zaggle EMS, so there is no need to use multiple systems or manual methods. This request captures critical information such as the name of the service provider, the cost, whether the payment is one-time or recurring, invoices, or any other relevant documentation.
Automatic Approval Processing
Pre-approvals are most effective when they are automatically routed to the appropriate people for review. When an employee creates a spending request, all pertinent information is transmitted. The approver can review it for policy or comment, and then tag it by category, such as hotel, airfare, or rental car, and route it to the relevant person for approval.
Set Up Multi-Level Approval Workflows
Adding diverse levels of approval for various expenses is an excellent way to control costs more efficiently. You can create multi-level approval workflows that automatically approve smaller payments while requiring multiple approvers to sign off on larger expenses. The logic behind multi-level approval workflows is that larger expenses can have a significant impact on your overall budget, so having multiple approvers ensures that you only approve valid expense reports.
Final Thoughts
An automated expense programme reduces the possibility of fraudulent receipts and overstated expense claims. It also makes it easier for employees to purchase items. The real-time alerts and insight into pending transactions make it easier for finance teams to capture the necessary documentation.
Zaggle EMS is one of the best expense management software that helps companies to create a more efficient and transparent expense process. Employees can submit expense reports more easily while avoiding chaotic departmental spending. In short, a well-tuned pre-approvals pipeline simplifies the management of a company’s finances. So, why wait? Contact us now and schedule a demo.
