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The hidden costs to enterprises behind manual expense processes
Fri, 22nd Jul 2016
FYI, this story is more than a year old

Concur is urging organisations to be wary of the hidden costs behind manual expense processes, saying using manual processes to manage employee expenses can be a waste of time and money.

According to Matt Goss, managing director, ANZ, Concur, organisations that use spreadsheets to collate and manage expense data can struggle with spend transparency and often risk non-compliance with company policies and tax legislation.

“Spreadsheets are largely ineffective for managing processes like employee expenses,” says Goss.

“There are many steps in the end-to-end expense process. When you rely on spreadsheets, data can become disjointed as it tends to sit on individual computers,” he says.

“Real-time, cross-team collaboration is virtually impossible and it can be difficult to track the status of an expense claim if you rely on people to keep the process moving,” Goss explains.

“It is also challenging to ensure employee and ATO compliance because spreadsheets can be prone to errors.

Concur regularly sees these four hidden costs in organisations using manual systems for employee expense management:

1. Employee frustration and wasted time

Staff can spend large portions of time gathering and submitting their expenses. According to Concur, many dread the process of attaching paper receipts and filling in lengthy forms. In addition, waiting for expenses to be reimbursed in the next pay cycle can force employees to stretch their budget prior to payday.

“Many employees resort to completing admin-related tasks like expenses outside of working hours. Many employees will even delay their expense claims until the end of the month, which then adds increased pressure for finance teams., says Goss.

“This can also reduce the level of employee compliance with expense protocols.

2. Laborious administration for finance teams

Finance teams can waste massive amounts of time re-keying data into spreadsheets, chasing employees for further information, chasing managerial approval, and cross-checking each claim against ATO guidelines and company policy.

“The lengthy process of manual expense management can often result in a bottleneck of claims waiting to be actioned,” Goss says.

“If there are too many claims it is more likely that finance will rubber-stamp claims for approval without meticulously reviewing the content,” he says.

“This can mean companies are spending more than necessary on travel and expenses. By automating the expense administration process, the finance team's time can also be better spent on value-added tasks like helping to budget and forecast, and claiming back businesses taxes.

3. Lack of compliance and control

Despite most organisations' best efforts, out-of-policy claims and expenses that breach ATO regulations can occur, according to Concur.

Goss says it is a delicate balance of checking every single claim and receipt against current mandates, while keeping the finance process ticking over swiftly. Many managers do not question an employee claim, which

“Automating the expense management process can make the approval process almost immediate, and requires managers to be directly involved in claim approval,” Goss explains.

“This reduces the demand on finance teams to closely review every application and chase claim approval.

4. Lack of spend transparency

Organisations that rely on a manual process involving spreadsheets cannot easily connect and track the data with other finance tools, like payroll and invoicing, Goss says.

Nor can they easily combine it with sales, marketing, HR, and other company data to deliver a truly holistic view of company spend, he says. This makes it difficult to budget, take corrective action, and ensure a steady cash flow.

 “Poor visibility into spending and compliance creates one of the greatest travel and expense (T-E) business pressures,” explains Goss.

“While spreadsheets will continue to have a place for certain calculations, automating T-E management can greatly help organisations with expense submission rates, deliver faster approval processes, and provide transparency into entire T-E process for compliance purposes.