We all strive to be as efficient as practically possible & the same holds true for businesses. Towards the end of every fiscal year, companies analyse their incurred costs with their revenues and end up deciding the corporate budget for the coming year. Traditionally, every company which decides to become lean, tends to focus on cutting down their overhead expenses or in the worst-case scenario, their workforce. But what if these cuts have an adverse effect on the revenue? Is there a way to cut down on costs, and increase efficiency without having to cut down on any allocated budgets?
The key to this issue is in the proper management of expenses incurred on a daily basis in any organisation. If a business uses manual methods to track and manage their expenses, they are following inherently inferior processes. Manual expense management is a time-consuming, error prone mechanism and provides poor visibility of the expenses.
Automated expense management can help cut down the time and cost of processing expenses by 40-60%. A study conducted by the Gartner Group on expense management processes states that even a 5% reduction in operating costs through expense management has the same impact as a 30% increase in sales.This might seem almost unbelievable but in fact, financial services company State Street, aims to cut down as much as $550 million in costs just through digitization and automation of its existing business practices.
Expense management automation is a win-win solution not just for finance executives who save a lot of time spent on reconciliation but also for employees who save around 162 hours per year of which was earlier used for filing expenses. Automation helps you to get rid of any errors that invariably crop up due to manual expense filing, hence removing the need to check for errors in expense reports. Furthermore, expense management automation makes it easier for companies to enforce their expense policies. A study by Aberdeen Group said that companies were able to increase adherence to expense policies by at least 15% through expense management solutions. It also results in a significant reduction in cash leakage.
The enhanced visibility in expenses also allows companies to optimize their budgets and do more with what they have. The aberdeen study also noted that companies that were leaders of a particular industry were 40% more likely to leverage expense management solutions such as Concur, Expensify, Coupa and Happay. Companies using Happay expense management have gained from a 30% improvement in labor productivity due to time saved by automation. They’ve also managed to save about 4-17% on costs through the solution.
If your business is still following the manual expense management process, automation and digitization could be a great way to reduce costs and improve productivity across the board.