How to automate expense reporting in 6 easy steps

“Ugh, I have to do my expenses” is a common employee complaint after any business expense or trip. But what does it mean? Basically, it’s the tedious task of filling out an expense report. An expense report is a formal document or online form used by employees to itemize and record the business-related expenses they incur, from rideshares, to client lunches, to new laptops.

For each expense, the expense report will require employees to enter details like date, vendor, amount, purpose of the expense, and supporting documentation (memos and receipts). For meals and entertainment, the expense report may also ask for a list of any attendees.

Expense reports are required whether an employee used a corporate card or a personal card. If they used a personal card, the expense report can also serve as a reimbursement request. Employees seeking reimbursement have the added pressure of needing to fill out their report perfectly in hopes of a quick approval so they can get paid back by their company.

Entering all those expense report details manually is a productivity killer. Manual reporting involves painstaking tasks like entering amounts and categories, collecting receipts, chasing approvals, and filing receipts.

Studies from the Global Business Travel Association (GBTA) say that all of this expense report work strains resources. Overall, GBTA estimated that companies spend about half a million dollars and 3,000 hours each year correcting errors on expense reports. According to GBTA:

• It takes employees on average 20 minutes to complete one expense report.
• But nearly 20% of expense reports are riddled with errors.
• Correcting those errors takes an additional 18 minutes.

The expense report time-suck doesn't just affect productivity. It also leads to frustration and reduced morale. Employees are bogged down by administrative tasks, managers are overwhelmed by the constant stream of approval requests, and finance has to reconcile it all. It's a lose-lose situation that takes resources from more strategic, business-critical tasks.

The good news is, expense automation can lighten the load for all team members.

Automated expense reporting is when businesses use modern technology to eliminate manual expense tasks and improve the entire expense process — from auto-capturing receipts to automating approvals to reimbursing employees. This type of automation is so important because of the sheer volume of expenses within a given business. In every size of business, everyone simply has more value to add than dealing with expenses reports.

Core functionalities of leading expense automation solutions include:

1. On-the-go expense capture via mobile apps and receipt scanning with optical character recognition (OCR) technology.
2. Automatic data entry and categorization using AI, eliminating manual input.
3. Faster approval workflows with automated notifications and reminders.
4. Seamless integration with corporate credit cards and accounting software for effortless data transfer.

By eliminating paper-based processes, manual data entry, and approvals delays, automated expense reporting frees your teams up to focus on their core job responsibilities while ensuring compliance. It's a powerful tool that drives efficiency, reduces costs, and enhances employee satisfaction, making expense management automation indispensable for modern organizations.

Increased productivity

Perhaps the biggest benefit of automated expense reporting is the time your team gets back. Signifyd estimates that expense reporting automation with Brex saves employees more than 1,000 hours a month. Other estimates say automation reduces the time spent on expense reporting by up to 80%. This allows employees to focus more on core business goals — whether it's closing deals, innovating products, or enhancing customer service.

With Brex, managers can also redirect their energy from approving reports to planning and team development, because expenses that are in policy are approved automatically and exceptions are detected and flagged for review by AI. This greatly improves the speed and quality of expense reviews. Last but not least, finance teams gain more time to focus on strategic finance initiatives.

Improved accuracy

Human error is inevitable in manual data entry, but automation eliminates the chance of such errors. AI-driven spend management software accurately capture and categorize expense data, significantly reducing errors. Moreover, pre-set expense categories ensure consistent classification across all reports. This accuracy isn't just about neat spreadsheets; it translates into better financial decision-making.

With real-time, error-free expense data at their fingertips, finance teams can make more informed budgeting and forecasting decisions.

Enhanced compliance

Automated expense reporting software excel at ensuring compliance with your company's expense policies. They act as digital guardians, meticulously enforcing spending and documentation rules on every card swipe or expense transaction. With Brex, you can set controls for category, vendor, amount, and more — and they’ll be auto enforced.

Any expenses that fall outside of the established policies are rejected, preventing non-compliant transactions before they happen. Plus, receipts and memos are automatically generated for thousands of merchants. It’s touch-free expenses. This automated vigilance reduces the risk of non-compliance, shielding your company from potential financial and legal consequences.

Moreover, expense automation software maintains a comprehensive digital audit trail, making record-keeping a more manageable process.

Faster reimbursements

With manual expense processes, employees too often have to sweat the reimbursement process. It’s why such delays are a major source of employee dissatisfaction.

Automated expense reporting accelerates this process dramatically. With instant receipt capture, automatic data entry, and automated approval workflows, reimbursements that once took weeks now take days or even hours. With Brex, even global reimbursements happen in just days.

This speed isn't just convenient; it has a tangible impact on employee well-being. Faster reimbursements mean reduced financial stress, improved cash flow, and ultimately, happier, more engaged employees.

Greater visibility and control

Automated processes offer real-time insights into company spending, empowering businesses to manage budgets proactively. With Brex, you can instantly see which departments are nearing their spend limits or where unexpected costs are cropping up. Brex also provides advanced reporting capabilities, allowing you to analyze spending trends over time.

This bird's-eye view of business expenses helps identify cost-saving opportunities, like switching to a cheaper airline or negotiating better rates with frequently used vendors.

Here are the key steps for implementing expense report automation with Brex.

1. Sign up for a Brex account

Getting started with Brex is a breeze. Simply sign up using our online application, and you'll be set up in our expense management software in no time. The process is designed for speed and simplicity, reflecting Brex's commitment to eliminating cumbersome business operations. For larger implementations, we also have dedicated implementation consultants who get you up and running quickly. Superhuman talks about how easy it was to set up Brex here.

2. Issue Brex corporate cards to employees.

Brex corporate cards automatically capture expense data – essentially creating an ongoing digital expense report – every time an employee makes a purchase. You won’t have to worry about card sharing since it’s easy to issue Brex cards to employees.

Account or card admins can issue physical or virtual cards to employees in minutes and manage their spend limits right from the Brex dashboard. And if you run into employee overspending or unauthorized transactions, check out our resource on how to handle corporate card misuse. Of course, if you choose to use reimbursements, that works seamlessly in Brex too.

3. Integrate Brex with your existing accounting software

Brex interoperates with other SaaS tools, offering software integration with popular tools like QuickBooks, Xero, and NetSuite, as well as Slack, Workday, and 1000s more.. Such integration ensures that expense data flows effortlessly from Brex to your accounting and other software, eliminating the need for manual data transfer and reducing the risk of errors. NetSuite even named Brex a 2023 partner of the year for our NetSuite ERP integration.

4. Define and categorize expense types within Brex

Every business has unique expenses. Brex gets this and allows those on paid plans to customize expense categories to match their specific needs. Whether it’s “client dinners,” “trade show booth,” or “remote work stipend,” you can set it up. This customization ensures accurate tracking and reporting across all departments. Our business expense categories article can help you get started. In addition, Brex AI automates the categorization of expenses and can even suggest mapping rules based on your past transitions.

5. Ask employees to use the Brex mobile app for expense capture

We reimagined our mobile app to help teams everywhere efficiently manage their spend on the go. Our consumer-grade, five-star mobile app is intuitive for employees to capture receipts, track expenses, and close out expenses. Brex also provides user-friendly training materials to get your team up to speed quickly. The result? A workforce equipped to manage expenses efficiently, anytime and anywhere.

6. Set approval workflows for expense reports within Brex

You can set multi-level approval flows in Brex that will be automatically applied. Creating approval workflows with Brex is a cinch. You can easily define who approves what and when, set spending limits, and establish escalation paths for larger expenses or flagged expenses. Once set up, these workflows automate the entire approval process, ensuring efficient review without constant manual intervention.

By automating tedious tasks and tracking business expenses with more accuracy, your teams can allocate more time to driving your business forward.

The impact goes beyond increased productivity, improved accuracy, and faster reimbursements. Expense report automation leads to happier employees, better financial decisions, and ultimately, a more efficient, profitable business. Sign up today to automate expense reports and unlock business agility with Brex.