For many organizations, expense management is not the most data-driven or quantitative of business functions. They manage their expenses using ad hoc practices, and many organizations do not have a working travel and expense management policy or the means to collect data and analyze it to get a better picture of the process. However, to paraphrase the old adage, what can be measured is done and what can’t, no one knows about. It is therefore essential for organizations of all sizes to assign some metrics to their expense management and measure the process against these metrics to understand how optimal it is or not. With expense report software, this entire process becomes easy and convenient. We’ll talk about some metrics in this post.
Average trip cost: This is one of the most important metrics to measure. This will tell you exactly how much you are spending on a trip on average. The actual numbers could vary wildly but when it comes down to it, you ignore the outliers and take the average of all the trips to learn how much an average trip costs. To understand each individual line item better, you can break down all the components of the expense report and measure each one.
Compliance: Another important metric that will tell how successful your compliance policies work is to measure the number of compliant reports out of the total number of reports. This will tell you whether your employees are staying compliant with your corporate travel and expense management policy or not. The result will tell you whether you need to take steps to improve awareness about compliance or dole out harsher punishments for violators.
The above are only two of the many important metrics one needs to measure about expense management. Expense report software helps organizations measure these and many other metrics so that they can understand the state of their expense management processes and take corrective action, if necessary.