Excel for expense management, an Unnecessary Risk and Cost?
The Institute of Finance and Management reports that more than 10 percent of the average company’s overall budget is made up of travel and expense (T&E) costs, second only to payroll. Despite the financial and operational importance of these expenses, 80% of businesses don’t know how much their expense report processing is costing them.
Of those that do know, businesses using manual processes (63% of SMEs and 38% of corporations) spend an average of $26.63 per report. In contrast, businesses with a fully automated expense management system spend just $6.85 per report.
That’s a startling difference, but a bloated cost per report is just one of many areas where Excel and other manual expense reporting systems are exposing your business to unnecessary risk and causing extra cost:
Security & Storage
The ever-increasing volume of receipts you need to store puts pressure on your team and adds unnecessary filing to their workload. Additionally, these Excel files you use to manage these expenses can be easily corrupted or overwritten.
With most businesses now relying on the cloud to ensure their data remains safe, manual expense management has become a bit of a dinosaur. An automated system, like Rydoo, ensures you have nothing to worry about should Tax Man come knocking for an audit – your data is guaranteed to be safely backed up in the cloud.
For a determined individual, Excel’s security systems may as well be completely non-existent. The low security and lack of audit controls make it easy to make changes, and almost impossible for your team to detect them.
Don’t think it can happen to you? Think again. The average business sees 3.8 incidents of insider threat (people inside your organization trying to harm or profit from it) each year. Your expense management spreadsheets are an easy target; even if you find suspicious mistakes, proving fraud will be considerably harder.
Researchers at the University of Hawai’i found that about 88% of all spreadsheets contain errors. Additionally, the researchers found that even with careful checking, the average person will spot only 50% of those errors.
Even if your team are Excel-superstars, statistically you will still have errors. How many expensive errors are your spreadsheets hiding?
Reporting & Analytics
The information held in your expenses spreadsheets can be used to identify patterns of behaviour and areas of inefficiency that can be acted upon to drive new savings. But for most businesses with a manual system, accessing that data is all but impossible.
Excel does provide the right tools, but the added complexity only increases the chances of errors creeping in. The extra hours they’ll need to spend tied to Excel to achieve it is another unwanted cost. Automated expense management service can provide this information with no added effort.
The benefits are clear. For example, you might notice one team is spending 40% more on their travel expenses per night than their peers. A quick check may reveal they’re frequently booking hotels and flights at the last minute, rather than planning in advance and saving money; that one insight could save your business thousands.
Your expense data is probably used in several key systems, including accounting, invoicing, and forecasting. Importing data from Excel into different systems is inefficient and a key source of errors.
Your spreadsheet will need to be formatted correctly for each one, and they won’t necessarily have the same requirements. Making changes to the formatting increases the chances that errors will creep in.
Automated expense management software allows you to export your information in a variety of formats, with no possibility of user error creeping in.
Fully-automated solutions cost about a quarter as much as manual solutions per transaction ($26.63 vs. $6.85) because they save so much of your employee’s time.
What new initiatives could your team focus on if they were freed from their labour-intensive spreadsheets?
Your Next Steps
Automating, streamlining, and digitising your business expenses is easy. Rydoo can help you increase productivity, eliminate the hidden costs of your manual solution, and easy the expenses process for both your front-line employees and your finance team.
Sign up for a free trial today, or schedule a 15-minute demo with an experienced member of our team.