If you lead a team that travels often, you’re probably familiar with the hassle of dealing with paper expenses. Paper receipts for hotel bills, invoices from trips, more paper for expenses with restaurants and other entertainment, and the list goes on and on.
Despite the fact that most traditional companies find this solution to be the most trustworthy and reliable, the truth is that using paper receipts can create risks such as lost, misplaced or damaged receipts, but it’s also a lot more time-consuming for the finance teams who have to manage all the paper receipts when working on reimbursements. Apart from that, it can also increase the risk of fraud and, ultimately, there are a lot more costs involved with handling paper than if you were to opt for paperless solutions.
Going paperless lets organisations store documents such as receipts, invoices, tax returns and even paychecks in a digital format and, if the country’s legislation allows it, forgo paper altogether. It also allows you to reduce time for both end-users, managers and the Finance team, reducing error and improving transparency, whilst also helping the planet.
Modern technology has allowed more and more companies to opt for paperless solutions. Technology such as Rydoo’s Optical Character Recognition (OCR) is able to accurately read 95% of receipts and can help make the process of going paperless easier and smoother, also making the Finance team’s and CFO’s lives easier.
6 benefits of using paperless expense management
1. Modernise the expense management process for the whole team
We’ve all heard of those dreaded end-of-month peaks and, in itself, a paperless solution will not miraculously solve this issue, but it can help. In a situation where you need to double-check something, you need to go through a pile of papers to find the right invoice.
If you stored your invoices digitally, it would only be a matter of finding the right invoice with just a few taps of your keyboard and mouse clicks. Easier and simpler for everyone involved.
2. Keep up with all employee expenses — even those who work remotely
With the advent of remote and hybrid work policies, it becomes even more important for companies to have access to all of their employees’ receipts and invoices in a digital format.
Imagine you have an employee working remotely in Barcelona and your headquarters are in The Netherlands. You would have to wait for that person to come into the office for them to bring their expenses and file them, at the risk of the paper being damaged or unreadable, leading to your next issue… the risk of fraud.
3. Stay compliant and reduce the risk of fines
Managing expenses with paper receipts and invoices can be tricky, especially if they end up damaged due to poor storage conditions. And if you end up being audited and showing a damaged receipt, it can easily be considered fraudulent as the information is unreadable.
Keeping digital copies of all your receipts and invoices provides a transparent way to trail all of your documents, which helps your organisation to stay compliant with all rules and regulations.
4. Reduce cost
With paperless solutions, you wouldn’t need to print out papers anymore, hence reducing some costs in office supplies such as printer machines, paper, print toner, etc.
At the end of the year, all of these costs just add up, affecting your budget, when you could be allocating that money to other things such as events or hiring new talent.
5. Free up office space by eliminating filing cabinets and storage room
Time is money but, nowadays, so is space. Renting prices keep getting higher and architects are constantly looking for creative solutions to deal with the lack of space in big urban centres. In this scenario, companies can’t waste space – especially if they want to grow.
Receipts normally need to be kept for up to 10 years, depending on the country your company operates in. Storage room space can be used for something more productive that adds real value, such as meeting rooms or call pods.
That is why digital archives are becoming popular. Besides their many benefits, they are easy to search through and free up office space – leading to further cost savings.
6. Save the trees, and the planet
In this day and age, going green is no longer a choice, but a responsibility, and part of going green is cutting down on the unnecessary use of paper when you have countless paperless solutions out there.
If you reduce printed expense reports, you will not only be saving money, but you will also be saving the planet. According to TreeHugger, each year in the US over 10 million trees are cut down and used to make paper, that’s over 79 billion litres of water. Also, did you know that most receipts are not recyclable due to the chemicals used on them? So if you want to save the planet, paperless solutions are the way to go.
The road to paperless
Going for paperless solutions is a choice most companies have been making over the last few years, but in order to go fully digital, especially with your expense process, there are a few steps you need to take.
The first one is finding a best-in-class solution for your expense management process that abides by all local rules and regulations regarding the digital storage of receipts and invoices. At the moment, not all countries allow companies to have a 100% paperless expense management system.
Some, such as Sweden, require enterprises to save paper records of up to seven years. In this case, the information can be transferred to electronic form, but the paper document may only be destroyed after four years. That means that, even though your company uses software that has the option of scanning and reading your receipts, it’s still recommended that you keep all of the paper copies in case of an audit.
On the other hand, over the last few years, more and more countries have been creating certifications that grant companies the possibility to have a 100% paperless expense management system. In Spain, for instance, if you use Rydoo’s for expense management, you’re allowed to store all your invoices and receipts in digital format.
Using paper receipts can create risks such as lost, misplaced or damaged receipts, but it’s also a lot more time-consuming for the finance teams who have to manage all the paper receipts when working on reimbursements.
The software has been certified by the AEAT, the Spanish public administration organisation to allow users to use digital receipts without having to keep the original paper receipts. Images still need to be stored for up to seven years, but in case of an audit, you can simply export a pdf file containing an overview of all expenses.
Rydoo has also recently obtained a similar certification in Germany that states it’s compliant with the GObd (Grundsätze zur ordnungsmäßigen Führung und Aufbewahrung von Büchern, Aufzeichnungen und Unterlagen in elektronischer Form sowie zum Datenzugriff). The GoBD is an interpretation of the law by the German tax authorities and being compliant with its requirements allows companies to go fully paperless.
For that to happen, a set of principles must be followed, such as accuracy and completeness, among others, and some sample procedural documentation that illustrates how data is processed and how records are kept must be created.
Check out our Compliance Centre to see all the current and up-to-date legislation on storing digital documents in your country.