Traditional expense claims management process involves risks of non-compliance and financial leakage to the organisation due to the tedious and error prone nature of manual data entry. Managing claims manually is not only time-consuming but also reduces productivity and diverts resources from core business functions. This article discusses the challenges of traditional expense claims management and how outsourcing can be a strategic solution to enhance your organisation’s efficiency.
Challenges of Traditional Expense Claims Management
- Manual Processing: Employers manually review receipts, calculate expenses, and cross-check policies, resulting in delays in claim approvals and reimbursements. Unnoticed discrepancies and delayed updates on the claim process may also arise, ultimately creating dissatisfaction among employees who rely on timely reimbursements for their expenses.
- Inefficient tracking system: A manual tracking system increases the chances of lost or overlooked claims, complicating efforts to monitor the progress of reimbursements. Employers must rely on manually inputting data on spreadsheets, emails, or paper-based systems, which are challenging to update in real time.
- Risk of non-compliance: Keeping up with ever-changing legislation is a challenge, increasing the risk of misclassified expenses, incorrect Goods and Services Tax (GST) handling, and non-compliance with legal reporting and reimbursement timelines. Employers may face penalties for unintentional compliance breaches, including fines of up to $5,000. Repeat offenders could incur fines of up to $10,000, imprisonment of up to 12 months , or both, particularly for failing to reimburse employees for their medical consultation fees as required under the Employment Act.
Overcoming Traditional Hurdles: How Outsourcing Can Transform Expense Claims Management
Transitioning to outsourced administration for managing expense claims presents a practical and strategic alternative to the inefficiencies of manual processing. Payroll Partners are equipped with the expertise and resources to help streamline your expense claims management while ensuring adherence to company policies and legal legislation. By leveraging both advisory insights and technological advancements, outsourcing will help enhance your operational efficiency and mitigate compliance risks.
Benefits of Outsourced Expense Claims Management
- Improved accuracy: Outsourcing often comes with a team of professionals who bring great attention to detail to verify reports. Progressive technology is often used to process and streamline the repetitive data-intensive tasks which significantly minimises human error and boosts time efficiency.
- Access to larger expertise: With the support of well-versed advisors, outsourced providers ensure that claims are processed in accordance with legal and corporate policies, reducing the risk of compliance violations and penalties.
- Budget management: Claim limits are established within the systems used by payroll partners. This function prevents employees from submitting inflated claims, which can lead to financial losses for organisations.
- Scaling with your organisation: As organisations grow, expense claims management becomes more complex due to increasing claim volumes. Payroll partners can manage these fluctuating volumes that comes with changes in the organisation’s scale without the need to hire or train additional staff. This allows your employees to focus on core business operations to achieve the organisation’s goals.
What should you consider before deciding your Outsourced Payroll Partner?
Before choosing an outsourced payroll partner for managing your expense claims, it is crucial to assess the expertise and experience they bring to the table. A reliable provider should have a proven track record in handling expense claims, ensuring both efficiency and compliance throughout the process. Their team should be well-versed in current tax laws, regulations, and industry standards to accurately identify errors or instances of non-compliance. Moreover, the right payroll partner will offer valuable advisory services, helping your organisation stay aligned with the latest compliance requirements and best practices. Ensuring the provider’s experience in these areas will play a key role in streamlining your expense claims management and maintaining the financial integrity of your business.
How can PayrollServe help?
Our Managed Claim service helps manage and process your expense claims – from assigning claims profiles and budgets to new employees, updating approval routes, and processing approved claims for payroll disbursement – all while keeping you in control of approvals.
Take control of your expense claims with PayrollServe’s streamlined solution, offering real-time visibility into global spending and ensuring compliance across multiple policies and limits. Let PayrollServe optimise your expense management, improve efficiency, and protect your bottom line—get started today!
Unsure if you are compliant in managing your claims? Take our free HR Health Check Questionnaire and claim a free consultation with us!
References:
https://sso.agc.gov.sg/Act/EmA1968?ProvIds=P110-#pr90-