If your organization is currently managing expenses manually, with spreadsheets, paper receipts and printed expense reports, then you must take into account the time and money you’re losing out on. Inconsistencies and frequent fraudulent practices might be adding on to the hassle. Automating expense management can help eliminate such issues because organizations can focus on profitability and scalability without worrying about the typical hassles of manual expense management.
- Manual expense management = Loss of Time + Money
“3000 hours, equivalent to 125 days or 4 months, are wasted by companies in manual generation of expense reports and correcting them” – Global Business Travel Association (GBTA)
The same study quotes this effort cost to be 0.5 million dollars. Thus, a significant amount of time and money is wasted in managing expenses manually. On the contrary, an automated system facilitates coding, approving, and reporting expenses much more speedily and efficiently than the traditional method. Cost of processing expense reports reduces by around 78 % per transaction through automation .
- Manual expense management = 30-45 day delayed spend visibility
Manual expense reporting deals with spreadsheets, late submitted paper receipts and lengthy approval processes; which hinders the real-time and end-to-end visibility of expenses.
“42% of the firms are unable to import data from disparate sources like external systems, at all” – The Power of Real-Time Insight by Forrester, May 2014
Thus, drawing insights from financial data becomes difficult with disparate information of cash-inflow and cash-outflow. With automated processes, the expenses are easily integrated with other business processes like accounting etc. in real time. This amalgamation leads to end-to-end visibility of business processes thereby helping in managing budgets and controlling spending.
- Manual expense management = risk of fraud + errors
Manual processes are prone to fraudulent practices and risk of errors in entering data, like unreasonable costs, rounding up mileage, etc. Automated expense management makes sure that fair and consistent rules are applied to all departments and employees by refraining them from entering wrong data or out of policy claims through customized or pre-populated fields.
“53% on a web-based system, automatically review and flag out-of-policy expenses” – 2016 Expense Management Trends
Thus, time is saved through automated consistency checks and fair practices across expense management processes.
- Manual expense management = poor policy compliance
Perils of non-compliance due to manual practices can result serious cash leakage for your company. The challenges are harder for a business working in various geographic locations and multiple countries. Automating the processes enables accuracy, easy auditing and quick changes to policies based on legislative changes.
“Compliance with company policy increases by more than 31% with the implementation of automated expense management”
– Aberdeen Group Study
- Manual expense management = poor data intelligence
Relevant data is necessary to make intelligent business decisions. Gaining access to centralized and streamlined information can help management to report on a multitude of performance indicators. Automation can help in developing policies like travel and expense policies, by identifying areas where healthier deals could be converted with suppliers. Cost savings can be achieved through supplier negotiations, insights to forecast the financial performance and managing the organizational cash flow.
It won’t be surprising to know that companies that are currently using an automated expense reporting system have experienced lower processing costs, faster reimbursement times, enhanced travel policy enforcement and increased visibility.
Automation is a flexible, scalable, and cost-effective alternative to traditional and manual expense reporting.