Expense management is one of those manual business processes often overlooked because it “works as-is” and seems like it will not result in a positive ROI. While business travellers and controllers are well aware of the pitfalls of manual expense management, higher-ups will often balk at the idea of spending money on it.
And yet, automating expense management is one of the most profitable process optimisations available to administrators and business owners wanting to reduce their costs and control their spend. Indeed, an expense management solution (EMS) can actually pay for itself in a matter of months and produce a more than decent ROI.
In 2018, more than half of European companies were not using a web-based travel and expense (T&E) solution, relying instead on pen and paper, spreadsheets, or other non-T&E specific tools. This lack of an automated solution presents a number of disadvantages, ranging from mildly irritating to quite detrimental in case things should go wrong. These disadvantages include
According to Gartner, an EMS “has relatively low risk but brings widespread positive impact as employee expense management is a common area of complaint for end users and finance teams alike”.
Adopting an expense management system will undoubtedly lead to optimisations throughout your expense management process, and possibly beyond.
Employees often fail to comply with their corporate travel and expense policies because they either don’t know them or find them too complicated. Implementing an EMS will drive you to review your policies and ensure they are understandable and realistic within the business context of your own organisation.
Expense entry, submission, approval, and control are all radically sped up and made more efficient with the help of automation. From creating an expense simply by taking a picture of a receipt to approving an expense on the go or even reducing control to exception handling, an automated EMS will reduce the time all those involved spend on T&E-related tasks.
With digital receipt capture, paperwork becomes a thing of the past. Travellers are freed from the burden of tracking and submitting physical receipts, which controllers no longer need to chase. Everything is digitalised for paperless processing and faster reimbursements.
Legal and business compliance are automatically ensured by the application. VAT, mileage, exchanges rate and allowance rules are routinely updated as they change. And your policies are enforced with a rule-based system which flags non-compliant items for easy and optimised review.
Integrating a VAT recovery partner with your EMS will allow you to increase the amount of VAT you can recover, particularly on foreign expenses. The risk and administrative burden are borne by the recovery agency while you only reap the benefits of optimising the VAT recovery process.
Optical Character Recognition, Artificial Intelligence and rules act together to eliminate the risks of human error and fraud. Data is captured and read automatically for correct input and compared to the documentation, rules, and policies to ensure that fraud is not an option.
Finally, centralising expenses as well as other accounts payable costs such as mobile phone subscriptions, leases or fuel cards in your EMS further streamlines your processes and increases your visibility on spend. More accurate figures allow you to make data-driven strategic decisions regarding your business, supporting cost savings and an improved user experience.
To optimise your travel and expense related processes, you will have to identify and remove waste in the form of reworks and delays in the expense management chain. Expense optimisation could very well snowball you down the path of optimisations in other closely or not so closely related processes. The newfound time and resources can be focused elsewhere such as internal lean improvement efforts or new products or projects with higher expected returns.
Analytics can help you reduce customer churn, identify cash leaks, and put costs into perspective with their benefits. Improvements in each one of these domains are great, but they’re even better together.
And improved access to data means that people across your organisation will be able to analyse and use that data to make better, faster decisions, and create more value for the business.
You can’t manage what you don’t measure. Having a transparent view on your cost centres and average spenders will allow you to manage your resources more efficiently, whether they be time- or money-based. And higher efficiency in a business is directly correlated to lower costs and/or improved returns.
With automated compliance and technology-supported error and fraud eradication, the business and legal risks you face linked to expense management decrease dramatically. You no longer need to worry about them and can spend your time and energy on more profitable tasks. And starting with improving your T&E processes will often lead you to engaging in optimisation efforts elsewhere, further reducing your risks and increasing your profitability.
Optimising your digital processes and bringing still-manual processes into the digital era will help you reduce cash out and increase cash in while lessening your risks. Why not start with expense management, a “low-risk high-positive-yield” process which most people dislike in the first place?
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