Author: Matt Goss, managing director, ANZ, SAP Concur
Automation has finally hit critical mass when it comes to expenses, with more than half of the respondents to the 2017 SAP Concur ANZ spend management Index stating that they have an automated expense management solution in place and a greater number of companies than ever before agreeing that they are considering automating expenses.
In 2016, only 27 per cent of respondents had an automated expense management solution and the proportion of respondents that had never even thought about automating expenses was nearly one-quarter (24 per cent). This year, that number has gone down to eight per cent, suggesting an automated expense management solution may be on the cards for even more organisations.
An expense management solution is often the last line of defence for small and mid-sized businesses (SMBs) to manage cash flow. While some teams are still dealing with paper invoices, a complicated workflow and a storage system that is neither accessible nor disaster-proof, a dedicated, cloud-based expense management system can reduce the possibility for error and dramatically slash the amount of time it takes to prepare, review, and approve expense reports. It also makes it easier to track expenses and identify unusual or out-of-policy expenditure.
However, many SMB’s remain loyal to outdated methods such as paper-based reports and spreadsheets. In fact, the use of spreadsheets is growing and hit 26 per cent in 2017, with a further 17 per cent who rely on paper-based reports. This creates ample opportunity for errors to creep in, and makes it easier for employees who are inclined to hide fraudulent activities. It also creates an administrative burden for those required to key in or manually write down their expenses and keep copies of paper receipts.
Having an automated expense management system is only the first piece of the puzzle. Integrating information across other systems can help extract insights from the data collected, which helps small businesses make smarter decisions. For example, it can help business owners understand how expenses are impacting the bottom line and where the organisation may be able to reduce costs by changing suppliers or negotiating better deals.
Despite these clear benefits and the increased number of businesses adopting automated systems, data analysis is still a way off for many SMBs. The index revealed that just over half of this year’s respondents analyse their data. 25 per cent said they analyse data to provide better visibility into cost/spend, 24 per cent said they analyse data to understand how expenses are impacting the bottom line, and only three per cent said they analyse data to continuously optimise their business expense policies.
Manual expense processes should be a thing of the past. SMBs need to recognise just how costly and outdated an AP system can be, and upgrade to a system that can deliver a return on investment quickly and improve operations across the board. The time that is wasted in collecting and submitting receipts, filling out forms, and getting approvals should be spent on other, value adding activities. Automated systems free staff from the burden of expense reporting and make it easier and faster to reimburse employees. The result is happier, more efficient employees and lower costs.
SAP Concur conducts the annual ANZ spend management index to provide insight into how Australian companies manage business expenses and supplier invoicing. For the third year in a row, SAP Concur surveyed 100 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.
* Matt Goss is managing director ANZ, Concur.
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