Automated expense reporting uses technology to handle the entire expense process—from capturing receipts to getting approvals to processing reimbursements—without all the manual admin.
Automated expense reporting uses technology to handle the entire expense process from capturing receipts to getting approvals to processing reimbursements without the burden of manual checks every step of the way.
Instead of traditional expense management, which involves keeping track of paper receipts and creating itemized spreadsheets, among other time-intensive tasks, automated expense reporting software automatically extracts data from receipts, categorizes expenses, and routes reports through the proper approval channels.
Automated expense reporting saves a lot of time and hassle—for your employees submitting expenses and for the HR staff that must review and approve them. Instead of spending valuable time on expense reporting, they can focus on what they were really hired for.
How does automated expense reporting work?
Here’s a step-by-step overview:
- Employees capture receipts by snapping a photo or making purchases using integrated corporate cards, allowing the automated expense reporting platform to extract and categorize the data instantly.
- The software checks each expense against company policy, flagging or rejecting anything out of bounds.
- The software routes expenses through customizable approval workflows for quick review and approval.
- After approval, the data is synced seamlessly with the company’s accounting system for reconciliation purposes.
- Finally, reimbursement is processed, often automatically.
As you can see, automated expense reporting isn’t fully automated but it’s close.
Benefits of automated expense reporting
Fewer errors, better employee experience, greater efficiency
Automated expense reporting minimizes human error by using technology to capture, categorize, and check expense data instantly, dramatically reducing (if not eliminating) the typos, miscalculations, and oversights that creep into manually entering expense data. For context, according to the Global Business Travel Association, 19% of manually created expense reports contain errors; to fix the mistakes costs $52 and took 18 minutes in 2022, on average. For a company with thousands of employees, the cost plus time adds up fast.
Say your employee needs to drive to meet a client to discuss a potential project. After they fill up their tank, they can simply snap a photo of their gas receipt, and the software automatically extracts every detail, including the amount and type of expense. Because your employee does not have to enter the gas receipt details manually, there’s less chance of typos, misplaced decimals, or expense misclassification (in other words, the software will classify gas as transportation, not lodging). For employees, this is more straightforward and less time-consuming than filing an expense report, and Microsoft has found that it has created a better employee experience.
Because there is less paperwork involved, automated expense reporting also minimizes your HR workload. Instead of chasing down receipts, reviewing spreadsheets line by line, and manually processing reimbursements, your HR and finance teams can focus on other priorities while the software handles data entry, policy checks (i.e., is the expense legit?), and approval routing.
Streamlined compliance and fraud reduction
Automated expense reporting ensures every expense meets company policy and legal requirements by embedding customizable rules directly into the platform. As soon as an expense is submitted, the system instantly checks it against spending limits (no more than $500 spent on a client dinner, say), required documentation (is the restaurant receipt uploaded?), and even complex regulatory standards (such as the U.S. Foreign Corrupt Practices Act), flagging or blocking anything out of bounds before it reaches approval.
This means out-of-policy or non-compliant expenses are caught in real time. For example, your company might have a strict no-alcohol policy for client meals; if a dinner receipt contains a charge for a bottle of Jack Daniel’s, the software should flag it.
Unfortunately, fraudulent expense reporting by employees occurs. Thirty-two percent of expense reporting fraud occurs within companies that lack “internal controls,” as defined by the Association of Certified Fraud Examiners (ACFE), meaning that the company did not have systems in place to catch fraud. Nineteen percent of fraud occurs because internal controls were somehow overridden. Robust automated expense reporting software has internal controls that can prevent fraud from occurring, and they can be programmed in such a way that internal controls are exceedingly difficult for even the most determined fraudster to override.
Fraud comes in many forms, but the ACFE states that most common “expense reimbursement schemes” are mischaracterizing expenses, overstating expenses, or making them up entirely, as well as multiple reimbursements.
Real-time visibility
Now, for a sobering statistic: Most instances of expense reporting fraud are caught 18 months after the fact, according to the ACFE. All the more reason why a live, detailed view of company spending, right down to the department, project, or even individual employee, is useful.
Automated expense reporting offers real-time dashboards and analytics, so you can catch trends, spot unusual expenses, and track against budgets instantly, rather than waiting for end-of-month or -year reports that often come too late to make proactive decisions.
Scalability
Do you have multilocation or global teams? Automated expense reporting offers a unified platform that consolidates spending across all regions, currencies, and offices. Teams in different countries can submit expenses through the same system, treating headquarters to a real-time, comprehensive view of global spending patterns.
This centralized approach makes it easier to maintain consistent policies worldwide (everyone has the same approval process), streamline cross-border reimbursements, and ensure compliance with local regulations.
Potential challenges
While automated expense reporting software can save you time and money, as well as improve the employee experience, it’s not without risks or challenges.
Upfront investment
Implementing automated expense reporting means budgeting for software licenses, system integration, and employee training.
Adoption barriers
Getting your team comfortable with new workflows and features requires dedicated training time, especially for employees who’ve been managing expenses manually for years and aren’t interested in changing how they do things.
Security
Automated expense reporting involves storing sensitive financial information on digital platforms…. What could go wrong? Obviously, privacy and security need to be a top priority. Your system must have strong encryption and secure access controls to prevent unauthorized access, data breaches, and fraud. Overriding such controls is the domain of fraudsters, so security is never a “set it and forget it” proposition. Continuous monitoring of the expense reporting software (by humans and machines) is essential.
Take the hassle out of global expense management
Proper accounting is integral to keeping your business running smoothly, but it creates a massive amount of administrative paperwork. Automated expense reporting is an amazing tool to cut through some of that, but what if you could take your accounting to the next level?
With Pebl, you can.
Not only do we streamline expense reporting, our global payroll services centralize your entire system, allowing for near real-time access worldwide. We cut out the paperwork and manual processes that slow down your team, freeing them to focus on work that matters.
Ready to eliminate expense reporting headaches and keep your global operations running smoothly? Let’s talk.
This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.
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