4 Reasons Why Your Business Shouldn't Manage Receipts Manually

Managing receipts is arguably one of the most important tasks in our business. It helps you keep track of every dollar that goes out of your company, which then guarantees that your spending efforts are optimised.

However, most small businesses choose to track expenses manually. While this may seem cheaper and easier, it is unfortunately not. 

Doesn't it get tiring chasing staff for receipts, reconciling them one by one, and then getting frustrated when the numbers don't add up? 

In this article, we will highlight our top 4 reasons why managing your receipts manually is a bad idea, and how it’s hurting your company more than you know. 

It’s Time-Consuming 

You may think that your business is relatively small and that there is no point in spending a huge sum of money on automating your expense management process. But in reality, you may be spending more hours than you realise collecting, compiling, and documenting receipts.  

In the image below, we highlight the process of manual expense management. 

This assumes that everything goes smoothly in expense management. But in reality, delays and unexpected circumstances happen. Here are some familiar scenarios: 

• Staff members were late in submitting their receipts.
• Managers have gone on leave, which means there’s a delay in approving the expenses.
• There’s not enough cash on hand to give staff, which means you’ll need to make a trip to the ATM to get cash. 
• A receipt may have been lost, and it may take time to retrieve or request a copy of the receipt from the vendor. 

This tedious process can take up to 15 hours a week! Logically, you could be using that time to do more important tasks.

Manually Managing Receipts Makes You Susceptible To Human Error

Humans make mistakes, which is why machines and automation are used to help with a multitude of functions - including data entry. 

Manual entry is not only the act of keying in data. In fact, it also involves the following tasks:

• Receiving the data
• Understanding the data and its meaning
• Understanding the system and learning how to enter data into it
• Entering the data
• Checking the data for accuracy

Looking at the process above, it’s easy to see how manually tracking receipts and expenses can be prone to error. Even the most experienced finance personnel will be unable to manage this task without mistakes, especially when dealing with too many receipts and expenses. 

It Is Not A Long-Term Solution 

In a small business, you may be more concerned with staying afloat and working on the day-to-day activities which need your immediate attention. Hence, thinking about automating your expense management is probably not on your list of priorities. 

But it’s never too late to start planning for the longevity of your business. 

What if your current customers, staff, vendors, and the overall size of your company grow? Using one staff member (or yourself) to manage all the expenses is not a feasible solution. This is because you’ll probably have ten other things to manage, and as mentioned earlier, managing multiple things simultaneously gives way to more mistakes. 

The truth is, managing expense receipts is a mundane and boring task that no one likes to do. If you’re considering hiring finance personnel to help you with this task in the future, chances are your staff would find it much more productive and enjoyable to perform other tasks, such as budget planning, rather than collecting receipts. 

Recent statistics have shown that 90% of employees are currently loaded with boring and repetitive tasks which could be easily automated, which leads to them spearheading the charge in automation. So as a business owner, finance automation is bound to happen sooner or later. 

Your Business Will Risk Overspending

With rising interest rates and cost-cutting initiatives, overspending is the last thing you want to do for your business. 

You may think that it saves costs to handle your expenses and receipts manually, but you are at risk of spending more money than intended. 

Let’s assume that an average employee spends 6 hours a month manually managing expense receipts. If they are paid an average salary of $25 an hour,  that would be $150 worth of expenses simply on data entry. 

There are also the indirect costs of errors in manual expense management - such as forgotten expenses, the incorrect amount entered, and duplicate receipt entries. These mistakes can cause your company money and impact your bottom line. 

So why go through all the hassle when you can have a solution that tracks your expenditure to minimise overspending? 

Our Solution 

Budgetly expense management solution helps Aussie businesses to capture their receipts and keep track of their expenses easily. That way, you can spend less time on tedious administration and focus on what really matters - your business. 

To learn more about Budgetly and how we help small businesses download our eBook: Managing Expenses with Budgetly.