No need to crunch the numbers; there’s a high cost attached to keeping expense management processes in the dark ages, and company leaders have spoken up about it.
The scary truth was revealed in a recent survey conducted by global virtual payments solution provider Conferma, who polled 250 U.S. Chief Financial Officers in company sizes of 500+ employees to find out how they are managing their expense policies and procedures. They discovered the average annual total cost of managing business expenses is over $1 million—and collectively, $33 billion is lost each year.
What’s at the bottom of this? Outdated expense management systems of course, which are all but stopping even the largest and most successful businesses in their tracks. Here’s why:
The survey revealed what we already knew, and the evidence adds up to a remarkably cumbersome situation:
- An average of 328 staff members are authorized to make purchases on behalf of the company,
- 66% of the CFOs say their current processes take too much time, and
- 58% say their current ways of doing things cost too much money
Expense management systems put into practice before the digital age simply pull at all the wrong resources, relying on time and money that could be better spent elsewhere in the business. Innovative leaders are eager to turn that around—invest in solutions that save them time and money and allow their employees to focus on more strategic revenue-building endeavors.
This is a big problem: employees in today’s omnichannel marketplace are using different methods to make payments and claim expenses. Cash, credit cards and checks; in-person, online or via mobile device; it’s getting more and more complicated and harder to control spending without the use of modern-day technology. And when you consider that many companies use a combination of paper, computer spreadsheets and web-based software to manage expenses on the back-end as well, it’s no wonder details can slip through the cracks.
They’re Steeped in Tradition
When a company is committed to maintaining manual processing for the sake of “this is how we’ve always done it,” we can blame tradition for all of the costly bottlenecks and workarounds. Without an automated solution, employees are using their own (probably inefficient) methods to keep track of receipts, proceeding through a stodgy, paper-based expense reporting process and then waiting around for reimbursement (and that’s just the employee!). Company expense administrators grapple with the flip-side of the equation, shuffling paper, reminding managers to sign-off on expense reports and spending an inordinate amount of time matching and reconciling.
Ready for the Future
Fortunately, there are solutions available to help companies streamline their processes and save costs. Nexonia Expenses is an automated, cloud-based expense reporting solution that digitizes virtually every step of the process. It brings the business of expense management to the present. Through its user-friendly web interface or mobile app, employees can create, approve and process reports, and consider their outdated process a thing of the past.