Learn How to Fix Broken Expense Approval Processes

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How to fix broken and slow expense approval processes

What’s the old saying? You have to spend money to make money. The innovative business sees the value in that philosophy while putting guides around spending that keep decision-making in check.

By Justin Campbell

8 min read •

July 13, 2023

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Like the reins on a racehorse, good expense management protocols keep you on the straight and narrow path to success. The only time you’d pull back is if you’re going to crash.

The evolution of this side of the company has failed to keep up with the progressive spirit the business was founded on. It’s impossible to win a horse race with the jockey pulling back on the reins.

We’ve explored some of the most common challenges contributing to broken and slow expense approval workflows and have actionable tips to enhance efficiency, eliminate bottlenecks, and empower your team with adequate spending controls.

What’s holding up your expense approval process?

There are several common causes for slow and inefficient processes when it comes to approving costs in a company. These causes can vary depending on the organisation’s size, structure, and specific operational challenges.

Manual workflows

With automation technology now on our side, there is no longer the need to rely so heavily on the manual movement of documents. This causes delays in routing and bottlenecks.

Lack of standardisation

Miscommunication and prolonged decision-making are the enemy. No matter how big or small, every company needs clear guidelines for requesting, reviewing, and approving spending.

Hierarchical approval structures

Multiple levels of management approval and oversight can cause delays.

Manual tracking and follow-up

Lack of visibility into the approval status is a significant concern. It’s essential to eliminate and challenge the process to monitor the progress and identify and fix bottlenecks.

Lack of delegation and empowerment

Efficiencies are found by removing centralised decision-making authority. More employees in charge of their own cost centres and budgets make the load more manageable.

Limited access to information and documentation

If approvers don’t have easy access to relevant information, such as budget details, project specifications, or historical spending, it can cause delays as they gather that additional information.

Inefficient communication channels

No one wants to rely on back-and-forth emails, phone calls, or physical meetings to confirm their approval. A central place with the correct information is needed to avoid misunderstandings.

If this reminds you of your business, now is the time to change.

How expense approval automation software can improve your business

We see it all around us. Technology is finding efficiencies with automation of tasks, reducing manual effort, and saving time. The area of approval automation is no exception.

Accounts departments everywhere are breathing a sigh of relief. Here’s what innovative businesses are getting with new technology like ApprovalMax.

Standardisation

Everyone knows where they stand with consistent organisational processes.

Real-time visibility

Easily track the status of approvals and identify bottlenecks. Always know where you stand on the budget and how the expense affects the bottom line.

Compliance checks

Technology can incorporate compliance checks and validations into the approval process, ensuring adherence to regulations, budget limits, and policies.

Audit trails

Capture approval history, timestamps, and user actions, which aids in audits and fraud investigations.

Segregation of duties

Enforce segregation of duties by setting up predefined approval hierarchies and access controls, reducing the risk of fraud.

Document management

No more emailing back and forth. Secure document management allows for easy attachment and retrieval of supporting documents during the approval process, supporting compliance requirements.

Collaboration and communication

It’s easier and quicker to explain things to those involved in the approval process, making for faster decision-making and fewer delays.

Mobile accessibility

Having on-the-go access to the approval process from anywhere makes sense. Anything less is unacceptable these days.

Clear budget alignment

Automated workflows help keep expense requests within budget, giving managers peace of mind without extra manual checks.

Custom approval rules

Define workflows based on your unique needs. Whether it’s setting thresholds for manager approvals or routing specific expenses to key decision-makers, flexibility is key.

Scalable for growth

Whether you’re a small business or scaling up, automated tools grow with you. Handle more approvals without adding extra complexity.

How to build a better expense approval process

Building a better expense approval process doesn’t happen overnight, but the rewards are worth the effort. Follow these steps to create a workflow that works for your team:

Map your current process: Understand where delays and bottlenecks are happening. Look at how approvals are requested, reviewed, and finalised today.
Define clear rules: Set spending limits, approval thresholds, and escalation paths so everyone knows what’s expected.
Choose the right tool: Look for platforms like ApprovalMax that automate workflows, provide visibility, and offer mobile approvals for on-the-go decisions.
Train your team: Don’t forget this important step! Make sure everyone understands the new process and how to use the tools effectively.
Monitor and improve: Collect feedback and adjust the process over time to keep things running smoothly as your business grows.

Why expense approval automation matters

By addressing these common bottlenecks, organisations can streamline and optimise their approval workflows like never before. Businesses can save time, cut costs, and focus on what really matters. With real-time visibility, stronger controls, and faster approvals, automation puts you in the driver’s seat of your financial workflows.

Justin Campbell, an experienced accountant with a decade at Xero, blends his deep understanding of finance and technology to simplify processes. He uses his expertise to help businesses work smarter, bringing precision and innovation to every initiative.