Many companies struggle to find the right balance between reducing costs and growing their business. For some, it seems like an impossible equation, for others it's a great challenge. We would like to embrace that challenge and unveil one of the secrets to reducing costs while increasing productivity and adapting your business to the digital world.
Companies tend to overlook one very important aspect of their daily activities when thinking about cost savings: manual tasks, and they can't be more wrong. The cost of manual tasks, in most cases, exceeds their value and end up costing companies a lot of money. In the US alone, companies spend $575 billions on administrative tasks every year. This is why automating low-value tasks is vital to decrease spendings, increase efficiency and boost revenues. One of these valueless tasks is expense management. Yet, in 63% of companies worldwide, expense management is still paper-based and time consuming.
Whether you are a heavy traveler, a manager or an accountant, serving a slow, manual and inefficient expense process can be very frustrating.
This 4 parts blog series aims to demonstrate why manual expense management is a money sinkhole for companies and show you how to reverse that tendency by choosing and implementing the right expense management platform.
How much money is your company losing ?
Most of the steps and hand-offs involved in a traditional expense claiming process are repetitive and ineffective, exposing companies to several human errors: out of every 100 steps, a human is likely to make 10 errors.
Manually filling expense reports, stapling receipts, approving stacks of papers, reconciling expenses with credit card statements etc... all of these steps make expense management a tedious process and translates in frustrated employees wasting valuable time on tiresome tasks. With such process, finance teams also lack visibility on actual spendings making companies very vulnerable to compliancy breaches. The cost of manual expense management is rarely calculated but hides tremendous savings opportunities.
A side from the laborious tasks, expense reimbursement also represents 14% of all asset misappropriation fraud schemes within companies. A fraud that 80% of european companies are experiencing due to their paper-based processes. In some companies, random and regular checks are put in place to prevent such fraud but this human control is insufficient and does not allow for foolproof duplicates and compliancy checks.
So what would be a more reliable and holistic solution?
Businesses who have started using a basic expense management platform to manage their expenses are moving towards increased security, but they are usually only semi-automated and still require multiple-hand-offs. 78% report missing documentation and incorrect information still being a challenge. An automated and mobile cloud-based expense management platform would be more efficient and would help companies put in place new processes allowing for real-time management and reporting
Automated, mobile & cloud-based
So what’s the difference between a basic expense management platform and an automated cloud solution? An automated cloud-based platform updates processes for the digital age, enabling remote, mobile and real-time management of expenses. By eliminating manual interventions and automating processes, companies can decrease handoffs, reduce the number of lost receipts, automate compliancy checks and reduce fraud risks.
Automated platforms with mobile applications and cutting edge technologies, make expense claiming as simple as 1-2-3. Employees scan their receipts using their mobile phone and the platform automatically pulls out all the relevant data using OCR technology (Optical Character Recognition). The receipts are allocated to the right cost center and general ledger and is available to review in real-time by managers and finance teams. Expenses can be approved or rejected as soon as they are uploaded by the employees using the mobile or web applications.
In numbers, expense automation could convert to 125% increase in compliancy, 70% decrease in processing cost and more engaged employees: Deloitte Belgium saved 2500 billable man hours every month by implementing Xpenditure.
Knowledge is Key
Transparency in expense management is without a doubt a crucial aspect for the management and finance teams. While basic expense management platforms make very useful information - imperative to control and spot fraudulent activities - hard to extract, automated and digital expense platforms are designed to recognise patterns and provide insights and visibility on your company’s spendings. All in just a few clicks. Reports detailing out of policies expenses, departments' spending habits, users' analysis can all be created within the platform, in just a few clicks. These advanced analytics allow companies to take action to instantly correct behavior or reassess budgets.
What are the most important factors to consider when choosing an digital expense management platform? Stay tuned for the 2nd post in this series, coming this Friday.