Many businesses struggle to strike the correct balance between two things: reduce costs and increase productivity. For some, it appears to be an unsolvable equation; for others, it represents a significant obstacle. But who’s to say there’s no way to reach such balance, especially in a digital era
Companies tend to overlook one very important aspect of their daily activities when thinking about reducing costs: manual tasks. The cost of manual tasks, in most cases, exceeds their value and ends up costing companies quite a large sum of money. In the US alone, companies spend $575 billion on administrative tasks every year according to ServiceNow.
This is why automating those considered low-value tasks such as expense management is vital to reducing costs, increasing efficiency and boosting revenues. Yet, 63% of companies worldwide still do expense management by using paper-based and time-consuming processes.
US companies spend $575 billion on administrative tasks every year. Automating low-value tasks is thus vital to reducing costs & boosting efficiency.
Whether you are a heavy traveller, a manager, or an accountant, serving a slow, manual and inefficient expense process can be very frustrating and in the long term, it can affect the level of engagement of your employees and, therefore, their productivity.
Can you reduce costs? By how much?
Most of the steps and hand-offs involved in a traditional expense claiming process are repetitive and ineffective, exposing companies to several human errors: out of every 100 steps, a human is likely to make 10 errors, according to the ebook 10 Ways Manual Tasks are Costing Your Business by Kofax.
Manually filling expense reports, stapling receipts, approving stacks of papers, reconciling expenses with credit card statements, etc… All of these steps make expense management a tedious process and translate into frustrated employees wasting valuable time on tiresome tasks.
With such a process, finance teams also lack visibility on actual spendings making companies very vulnerable to compliance breaches. The cost of manual expense management is rarely calculated but hides tremendous savings opportunities.
Aside from the laborious tasks, expense reimbursement also represents 14% of all asset misappropriation fraud schemes within companies. A fraud that 80% of European companies are experiencing due to their paper-based processes. In some companies, random and regular checks are put in place to prevent such fraud but this human control is insufficient and does not allow for foolproof duplicates and compliance checks.
So what would be a more reliable and holistic solution to reduce costs?
Businesses that have started using a basic expense management platform to manage their expenses are moving towards increased security, but they are usually only semi-automated and still require multiple hand-offs. Around 78% of those still report missing documentation and incorrect information as a challenge.
An automated and mobile cloud-based expense management platform would be more efficient and would help companies put in place new processes allowing for real-time management and reporting, which will lead them to reduce costs while increasing productivity.
– Automated, mobile & cloud-based
So what’s the difference between a basic expense management platform and an automated cloud solution? An automated cloud-based platform updates processes for the digital age, enabling remote, mobile, and real-time management of expenses.
By eliminating manual interventions and automating processes, companies can decrease handoffs, reduce the number of lost receipts, automate compliance checks and reduce fraud risks.
In numbers, expense automation could convert to a 125% increase in compliance, a 70% decrease in processing cost, and more engaged employees. Deloitte Belgium, for example, saved 2500 billable man-hours every month by implementing Rydoo
– Knowledge is Key
Transparency in expense management is without a doubt a crucial aspect for the management and finance teams. While basic expense management platforms make very useful information – imperative to control and spot fraudulent activities – hard to extract, automated and digital expense platforms are designed to recognise patterns and provide insights and visibility on your company’s spending. All in just a few clicks.
Reports detailing policies, expenses, departments’ spending habits, users’ analysis can all be created within the platform, in just a few clicks. These advanced analytics allow companies to take action to instantly correct behaviour or reassess budgets.