By Kyle Ferguson, chief commercial officer, Spendvision
Organisations are now starting to realise the importance of travel and expense management (T&E) as strategically significant. However, business intelligence specialists, Aberdeen Group suggest many companies cannot establish which expense management system will be most effective for them.
Selecting the right solution requires thought and planning. UK companies are often thought of as being more conservative when it comes to changing their existing processes, even when it is clear they will benefit from significant cost savings. Businesses in Japan, Australia and the US are generally more accepting of new technologies and have embraced The Cloud and card-based payments. The integration of The Cloud is helping organisations control their corporate spend across all platforms - cards, cash and beyond.
Nevertheless, on the plus side for the UK, there is evidence that organisations such as councils and universities are realising the benefits of PCards and The Cloud. Essex County Council and Sheffield Hallam are two good examples of where integration of the cloud and card based payments are helping them save money.
It is important to remember that not all companies are the same. One company may be using The Cloud effectively, while another may be stuck in a swamp of paper and lost receipts. In this case jumping straight into using advanced technology would be a disaster.
To ensure the system works for your organisation, Spendvision have developed five top considerations when investing in an expense management system:
Tip 1: Calculate the cost of your current transaction and expense process.
Prove the need to yourself. It is likely you are paying more to process the purchase of goods than the cost of the goods themselves. According to business analysts Aberdeen Group, in 2012 the average amount companies spend processing a single “expense report” (the cost of processing an expense from the moment it is submitted through to audit) was £12.
Tip 2: Ditch paper and manual processing
The single most important thing you can do to clean up your transaction management system is to go digital. If you have user-friendly software to view, log and approve the money your employees are spending, you’ll save a lot of processing time. This may be from invoices, cards, telephones, cash, or other forms of payments such as contactless. You can also run reports using a variety of parameters e.g. by department or even a specific employee.
Tip 3: Choose an expense management system which is tailored for your organisation.
You know your business needs better than anyone. If travel is a big portion of your outgoings, consider incorporating your Travel Management Company (TMC) with your expense management system, which allows you to import travel bookings and capture card, cash or other spend incurred.
Tip 4: Make sure your system catches all your transactions
Having a central system means you can gauge exactly how much money your company’s employees are spending without waiting until the end of the month to receive the bank statements. Ultimately, knowing where your money is going means you can make better decisions, devise new policies to enable money-saving, such as bulk-buying, forecasting and planning, and analyse areas of overspend.
Tip 5: Make sure your system is both user-friendly, and your employees are trained in how to use it.
Everyone, from the person making the purchase to the person approving it, should feel the benefits of your EMS. As anyone who has filled in a travel or expense form or had to keep records for PCard purchases will testify, finding, printing out and filling in forms, before obtaining sign off, is often a long-winded process. Happy employees will therefore be borne from a system that automates all this.