- Inefficiencies in spend management leave money on the table and create unnecessary work for finance teams.
- Automating manual tasks is an opportunity for companies that benefits all stakeholders.
- Here’s how finance teams can make traditional expense management a thing of the past.
T&E, which stands for travel and expense, is the second-largest controllable cost for businesses and an important driver of growth. But despite its significance, most companies have ignored implementing efficiencies – which costs real time and money. In a 2020 survey from Forrester, 85% of respondents from large enterprises reported that their businesses didn’t have a cloud-based solution for travel and expense management.
The traditional process for managing T&E – compiling spreadsheets and reviewing monthly reconciliations – is labor-intensive and often has errors. It takes 13.6 hours for everyone involved in the chain to process all travel expenses for each trip. Yet many companies continue to cling to paper receipts and other manual legacies as part of their process.
But automation exists that can save your company money and devote time to higher value-added work. Here are five ways finance teams can streamline their spend-management processes.
1. Say goodbye to traditional expense reports
Has your company ever analyzed how much expense reports cost annually? The Global Business Travel Association found that using traditional spend-management tools, a single expense report takes 20 minutes and costs $58 on average to process. Plus, one in five expense reports contains errors, and corrections add an additional 18 minutes to the process.
Modern spend-management platforms eliminate the need for outdated processes. With machine learning, expense-management tools can automatically identify out-of-policy spend and flag suspicious charges. When expense processing is no longer taking time across teams, employees can focus on more important things, such as strategy or planning their next meeting.
2. Get real-time visibility into spending
Modern fintech tools provide on-demand analytics about your company’s expenses. Access to live, interactive dashboards allows for more insightful analysis into spend numbers that can help drive better decision-making. The ultimate benefit of this tool is that it can help uncover innovative ways to implement cost-saving efficiencies, in order to build a healthier business.
3. Set proactive policy controls
If employees aren’t familiar with a company’s T&E rules, they will more than likely have to be enforced after the fact – a waste of everyone’s time and money. By integrating and automating policy controls, businesses can better adhere to budgets. This feature also eliminates enforcement headaches when in-policy expenditures don’t have to be reviewed. For example, if the company card is swiped for an out-of-policy dinner, the charge would be immediately declined.
4. Implement virtual cards
Credit Suisse’s research found that virtual cards are among the hottest trends in fintech, growing at two to three times the underlying industry growth rates. And platforms such as TripActions Liquid are using them to upend the process of spend management.
Virtual cards make it easy to control and limit company spend, no matter if it’s travel expenses, spot purchasing, or light procurement. Overpayment isn’t possible because once the account policy has been exceeded or the card’s expiration date has passed, the card closes automatically. An additional bonus: Virtual cards can spare your company from a great deal of risk associated with online fraud compared to traditional physical cards.
5. Automate monthly reconciliations
Spreadsheets are a helpful tool for some tasks, but they’re no match for the data-heavy process of monthly reconciliation. Out-of-date software makes matching spend with statements an irritating exercise. Automating the reconciliation process captures all payment details from receipts and categorizes them – effectively removing those tasks from your to-do list. Another benefit of automation? It dramatically reduces the risk of errors and drops the cost of processing expense reports from $58 to less than $7, according to Paystream Advisors’ 2015 T&E management report.
The bottom line is that with modernized solutions in place, spend management can become a pain of the past, allowing finance and accounting professionals to focus on the future of their businesses.
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