A company can lose profits through a hundred cracks and crevices. And few things are leakier than expense reports. Although employee reimbursements are mostly related to travel and entertainment - airline tickets, gas, restaurant meals and such - they can also cover purchases of other items, from a pack of legal pads to an emergency car towing. One of the few things that every business owner will agree on is that they add up fast.

If you're like most entrepreneurs, your gut says at least some of this money is squandered, either on expenditures of dubious necessity or on goods and services that could have been acquired more cheaply with a purchase order. But you haven't a clue what to do about it.

Employees can get reimbursed twice
The answer lies with technology. More than half a dozen companies sell or rent software to rein in employee expenses and let more money flow to the bottom line. Tighter enforcement of spending rules is only part of the story. By eliminating one of the more inefficient and aggravating rituals of corporate life - hoarding receipts and writing numbers in tiny boxes - these systems can easily halve the time spent on creating and processing expense reports.Employees can get reimbursed twice as fast so they have less to complain about and the computerized data can be endlessly sliced and diced to spot inefficiencies and strike better deals with vendors.

Expense management is more than electronic forms. It also contain a couple of discrete activities where ‘Reports’ is the most important one. It’s a process of capturing transaction data, putting it into report form and obtaining management approvals. Typically, an employee uses a desktop, laptop or handheld computer to fill out the form online. In some cases, employees record expenses as they occur. A few systems even detect when a company credit card is swiped, be it at a hotel, restaurant or office supply store and fill in the blanks automatically.

The right software
Once a report is filed, the system automatically reviews it, comparing it against travel policies, business rules, and spending limits, then emails department heads requesting online approval. Besides ‘Reports’ you’ll probably like the use of the ‘Payment’-function where approved reports are automatically channelled into the accounts payable system, which makes a direct payment to the company credit issuer or electronically transfers money to the employee's bank account - often within three days.

Employee-initiated expenses can add up fast, but getting a handle on them can be just as quick. The right software can better manage and streamline the process, while helping you spot inefficiencies that are draining profits from your business.