As we move into budget planning, it’s time for team leads to start creating wish lists for the coming year. One of the most critical questions is, “how much will it cost, and what’s the ROI?” This is essential decision-making information every year, but many CFOs will be reluctant to provide a budget for any new spend that doesn’t deliver tangible ROI. Therefore, you’d better make sure you have a rock-solid business case.
If one of your goals for the coming year is to improve your T&E processes by bringing on a modern expense management solution, we’ve got you covered. Here are the five biggest reasons an expense solution can deliver rapid ROI.
1. It’s cheaper.
“Excel is free!” That may be the case, but when you factor in the time of the submitter, approver, and finance team, expense reports are expensive to process, with estimated costs running anywhere from $35-$58 each. Even for a company processing just 200 expense reports per month, this could mean an annual cost of almost $140,000. An expense management solution automatically captures data from receipts and travel bookings, and smart business rules verify that spend is within policy. This means expenses can be created in less than a minute, and approvals can be almost instantaneous. The ROI payback period on an expense management solution is just a few months.
2. It reduces expense fraud.
About three-quarters of all travel expense fraud is conducted by those whose employers still use manual expense reporting processes. Approvers simply don’t have the time to pore over every report and verify that every line item matches up with a receipt and is in policy, making fraud easy. A modern, intelligent expense solution uses business rules and machine learning to flag anomalies and prevents the vast majority of fraudulent expenses from making it to the approval stage. With about five percent of business travelers admitting to falsifying their expense reports, at an average of almost $2,500 per year, a company with 200 staff submitting manual expense reports could expect to see $25,000 in annual losses.
3. It gives you deep, actionable, insight.
The ability to perform expense spend analysis in a simple and timely manner enables organizations to identify trends and patterns which can be used to make smarter spending decisions or reduce wasteful spending. Data held on spreadsheets is simply too cumbersome to deliver meaningful insight. Travel managers can use an expense solution’s analytics capabilities to leverage insight into spend with airlines and hotel chains to negotiate volume discounts with preferred providers. Controllers can spot areas where employees can spend more efficiently by eliminating duplicate or excessive purchases.
4. It reduces the risk of costly errors.
An estimated 19% of expense reports contain an error. Whether a submitter typing the wrong amount on an expense spreadsheet or a finance team member accidentally transposing incorrect data into the accounting system, manual processes are rife with errors, which can often be very hard to track. In the case of an expense report, this could mean anything from an incorrect dollar amount to the wrong GL code. Combining this with the potential of data being incorrectly keyed into the accounting system creates an unacceptable level of risk. A modern mobile expense system can automate the process from data capture to reimbursement, meaning no need for data rekeying, lowering the chance of these errors to virtually zero.
5. It can help generate revenue.
One of the best ways an organization can optimize its spend is through corporate card cashback rebates. But these programs can be cumbersome to manage, leading to fewer employees receiving cards and less spend creating lower rebates. The latest generation of expense management systems allows managers to issue virtual and physical cards in real-time - within the solution - to their teams without the need to go through the card provider. Cards can have pre-set spend parameters to provide control and enforce policy, and transaction data can match directly with a receipt for simple reconciliation. Whether it’s used for a one-off purchase, a recurring subscription, or a two-week business trip, more spend can go through cards, leading to more significant rebates.
All of the above can drive very tangible financial benefits but aren’t the only way to create value for your organization. Every minute one of your team members spends on a laborious admin task is time that could be spent on productive tasks. Sales executives can spend more time selling, managers can spend more time coaching, and finance teams can focus on analysis.
And while it may not be as easy to quantify, none of your team members are happy about using last century’s technology. Show them you care by giving them a solution that makes their lives easier.
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Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care.
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic.