Expenses are Expensive!...
(When Processed Manually)
Traditional, manual paper-based expense report process is complex, cumbersome and expensive. It involves compliance with government regulations and corporate procedures, and employee's time and money. The majority of employee-incurred business expenses are related to travel and entertainment, (T&E) which in most organizations can account for 20 cents of every operational dollar spent. Typically, an organization spending $4 million annually on T&E alone spends another $400,000 a year just to process those expenses.
Automating the process of expense management helps streamline and manage the complexities and compliance issues, while delivering high return on investment and drastically reducing processing costs.
ExpenseAnywhere: The Right Solution at the Right Time
American Express has estimated that travel and entertainment costs are the second-largest controllable expenses at U.S. companies. At the same time, few companies have been taking advantage of automating their expense management processes.
The American Express study further showed that depending on business complexities, and practices and procedures in place, companies spend on average US$36.46 up to as high as US$75.91 to process a single expense report.
At first glance, such costs appear excessive and many companies tend to reject it - "not for them", but upon reflection they agree that their processing costs are indeed high. Simply put, if your frequent travelers (who are also typically well compensated employees), spend just about an hour to sort and enter expenses on a paper based expense report at the end of their trip, it is not inconceivable that costs start mounting.
Notwithstanding the cost associated with the time spent by their managers to verify and approve the expense reports and by the accounting departments in manually verifying, auditing, and keying-in the data in their accounting system. A major insurance company in the US with over 35,000 expense reports to process monthly has over 70 persons just to re-key in the data!
The American Express study also pointed out that companies that employ the "best practices" and automate expense management processing could achieve potential cost savings between 70% and 89%. In fact, with travelers incurring substantially less time to enter the expenses through an automated user-friendly system alone, results in significant cost savings.
The Benefits of EMA (Expense Management Automation)
In another recent study (December 2001) Aberdeen Group found that by employing Expense Management Automation (EMA):
- The average cost to process an expense report dropped by 80%.
- The average time to enter an expense report decreased by more than than 60%.
- The average time to settle an expense claim decreased by more than 90%.
Aberdeen Group further states, "companies using EMA solutions can pay 10% less for goods and services through increased contract compliance".