Why bother trying to gain control of expenses?
Paper trails and time-consuming expense processes simply don’t cut it anymore
Employee travel and entertainment (T&E) expenses cost the UK economy an estimated £8.2 billion per year. With such a large chunk of our company budget covering T&E expenses, why aren’t we turning pain into gain?
T&E expenses alone account for 8% to 12% of the average company’s total budget. These expenses keep mid-sized businesses awake at night for three reasons:
- Processing expenses is a costly business
- Manual and paper-based processes are often inaccurate and time-consuming
- And a new entry to the top three – business travellers are on the move – they can’t adhere to outdated expense systems.
Expensing – the numbers
- Almost four million UK employees claim expenses – in 2012, on average they each made 36 claims and received more than £2,000 in expenses. That equates to around 146 million expense claims in the UK.
- Market analysts estimate that the global market for SaaS-based expenses management software will grow at 2% each year over the period 2013-2018; greater than the 7% growth rate for the US$49 billion market for travel and expense management solutions as a whole.
- A recent survey of 200 accounts payable and financial professionals in the US has determined, with +/‑ 5% confidence for the wider American marketplace, that 77% of companies have a centralized travel and expense system.
- The report found 43% agreed the ability to enforce corporate travel policies was the biggest challenge while 42% reported manual data entry and inefficient processes.
- Only 53% use automated solutions for expense report submission, with just over a third using a fully automated/integrated travel and expense system, the remaining 47% use a combination of paper (32%), email (13%) or fax (2%) to submit reports manually.
- An incredible 52% of employees are required to submit receipts for all expenses, whatever the value, with 45% sending paper receipts to the finance department.
- The capability for reporting and analysis ranks as the top feature being used (74%) in automated travel and expense solutions.
Behind the numbers
Every company incurs expenses. Firms need streamlined processes to record them, reimburse employees and, if it offers a service, monitor and recharge expenses on behalf of clients. But despite the need, many companies rely on paper or spreadsheets. Not only outdated in its technique, this can see an expense costing more than three times as much to process as it should.
Expense management touches people across an entire organization. Collating expense evidence and reporting on expense claims can be time-consuming and difficult to control. How can people manage or reduce expenditure or gain real insight into how expenses are incurred, with just paper forms?
Fuelling the growth of sales of expense management software is the ubiquitous use of smart phones by employees who incur T&E expenses, and the growing acceptance of cloud-based services to capture, approve and export to financial systems for those expenses.
If you are clinging to the past with traditional (paper-based) methods of capturing and processing expenses, consider a new way. More than ever, mid-sized businesses require transparency, better digital capabilities and robust systems which can be rolled out, ready for expansion.
Consider Zetadocs Expenses and make sense of expenses.
Sources Aberdeen Group’s “T&E Expense Management” March 2012 Aberdeen Group’s “Travel and Expenses Management: Spend and Save” May 2014 TechNavio’s “Global SaaS-based Expense Management Market 2014-2018” PayStream Advisors’ “Travel and Expense Management Benchmark Report” Q2 2013 Aberdeen Group’s “T&E Expense Management” March 2012