Automating expense management brings benefits
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Australian businesses aren’t managing their expenses effectively, using outdated manual systems and missing out on opportunities to address compliance issues and save money.
According to the 2015 Concur ANZ spend management index, Australian businesses need to realise there is value in automated systems when monitoring and managing employee expenses and supplier invoices.
Matt Goss, Concur general manager, says, “There is widespread awareness that having travel and expense (T&E) management policies in place can help businesses manage their costs more effectively.
“The next step for these businesses is to implement systems that help reduce errors, improve productivity, and increase cost efficiencies.”
Concur’s spend management index looks at how Australian companies manage business expenses and supplier invoicing.
It canvassed 104 senior finance and management decision-makers from a variety of industries including financial services, retail, food, transport, insurance, utilities, resources, entertainment and other professional services.
The index revealed that 27% of respondents still use paper-based expense management. In 23% of businesses, 11% use spreadsheets, and 15% use a cloud-based expense solution.
“Using a disconnected and manual system means businesses are missing out on opportunities to address compliance issues and save money,” says Goss.
However, 58% of businesses surveyed analyse the data from their expense management systems.
Of these, 40% of respondents said the expense system is integrated with accounts payable. Only 6% of companies say the system is integrated across business departments.
Having an integrated system provides businesses better visibility into what money goes in and out of the business, says Concur.
“These companies are likely to come out on top when it comes to managing costs more effectively, minimising overspend, and detecting and preventing fraudulent spending,” Goss says.
In fact, more than a quarter (26%) rated better and easier reporting as an important benefit of having a cloud-based expense management solution, and another quarter said better visibility into corporate spending was important.
Furthermore, 25% of businesses said the most important benefit was less chance of fraud and better compliance, followed by cost efficiencies and savings for 24% of respondents.
Business appear to be recognising the importance of cloud adoption and the benefits of automation.
More than half (57%) of businesses surveyed said they processed invoices via a cloud-based automated account payable solution.
Of those surveyed, 11% of businesses use finance or accounting software, and 9% use manual systems.
A further 9% still use a paper-based system while 3% have a custom in-house solution.
Reduced paperwork came out on top of the list of things businesses would like to change about their accounts payable process, with 39% of respondents selecting it. Increased productivity was next at 29%.
Goss says, “Implementing an automated solution yields multiple benefits for businesses when it comes to the T&E policy.
“For example, it removes the need to micromanage employee spending, giving business travellers freedom to choose within certain budget limits.
“Importantly, automating the employee expenses and accounts payable process, rather than using a manual or paper-based system, lets businesses collect and analyse spending data.
“They can then identify spending patterns to see where they can cut costs, where employees are behaving responsibly, and where fraud or theft may be occurring.”