It wasn’t that long ago when claiming expenses incurred on behalf of the company were lodged on a form the office junior created. We then progressed to Lotus 123 and then to Excel utilising formula to manage accuracy. Surprisingly today, we see many organisations still using the old excel form to control travel and expense management.
The changes in the global economy have caused many organization to rethink the old way of doing things. This has introduced new and improved methods that allow you to manage your cost. Also allow you to accurately tack the amount of money you spend with a particular supplier. In terms of FBT, the reporting tools available will allow you to choose which method of calculating entertainment will be beneficial to your business. As the information is available quickly and effectively, giving you the choice. These tools will allow you to not only improve your bottom line, but give you accurate insight on where and how your money is spent.
Below are 7 reasons why utilising technology will improve expense management and benefit you and your business
- Compliance - Enforcing expense policy and ensuring that receipts are lodged with accurate information to allow better management of tasks such as FBT and tax compliance has been a problem for many accounting teams. Having said that, have you ever sat down and thought how much it costs for your accounts payable officer to enforce compliance on a movie rental. Creating a set of rules and enforcing those rules will not only save your company money, but it will instill a discipline on all staff to better manage how they spend the company's money. The virtual police are continually monitoring the rules you set to safeguard compliance and inject a level of accountability onto the individual.
- Auditing - As a rule most expense statements have random audits. Where a member of the accounting team screens the report quickly for obvious errors. The majority of un-allowed expenditure seam to still slip through. If we take the above example, the cost of a movie rental is say $10. If we extend that to 30 reps per month per year we are looking at $3,600 pa. This will definitely not cover the cost of an auditor but it will pay for 3 laptop or 9 tablets or even the cost of the Christmas party. Therefore the virtual police has not only recouped the cost of establishing such a system. It has also established a precedent to deter any future claims of this nature to be lodged.
- Business Intelligence - Imagine being able to report on all the expenses incurred throughout the year. Identifying that the Hilton is the favorite hotel of you Sales Manager when he/she travels interstate. Collating such information, you are then able to take this and convert it to dollars saved. By approaching large hotel chains with an accurate per annum spend. Thus generating better buying power to negotiate greater savings through corporate accounts and or daily rates.
- Automation - The key to automation is to move the processing onus back onto the individual. Ensuring compliance on initial input. This will establish that the spend is within the range of allowed expenditure and compliant with the rules set. Not only will this save you time in your accounts team but the technology allows you to manage the input at your leisure. By utilizing the apps available on smart phones. Users are able input and complete expense data while waiting for the taxi, plane or waiting for the coffee to be made at your local cafe. The user is able to take an image of the receipt and allow the accurate OCR tools to complete the rest. No longer having to carry an envelope of receipts back to the office. Then trying to remember where and what the receipt relates to.
- Fringe Benefits Tax - The tax department says "you choose" and in most cases you choose which ever is going to be the easiest to prepare and least expensive. After the FBT return is lodged, you wonder "Am I paying too much Entertainment FBT". Again, by utilising the power of technology, let the Business Intelligence tools built in, give you the most cost effective method to use. Potentially saving thousands of dollars and hours in preparing accurate and compliant reporting.
- Expense Processing - There are many methodologies in calculating the cost of processing an expense form. Some accurate and others not so accurate. Whatever the case there is definitely a cost to be saved. Although this cost may vary between organisations, a recent study undertaken showed the cost of not automating to be approx. $41.12 compared to the cost of automation to be $7.17 per expense statement processed. It is obvious how technology can help you reduce your management costs quite significantly.
- Reporting - Once the data is captured in one place the ability to report that information is effortless. Today Excel can directly connect to a database and manipulate data into so many different ways to provide information which will allow you
i. to better budget,
ii. better forecast,
iii. buy smarter and
iv. Manage delinquency and dare we say fraud.
Technology is changing our lives on a daily basis. New and improved tools are being developed to make our lives easier. Giving us the information to better manage cash, improve buying power and tighten controls to reduce any liability as a result of non-compliance. Having been a CFO for many years, I have been able to experience the pitfalls of preparing accurate and timely financial information. Having the tools at the click of a button will not only improve the ability of your business to better manage your cost base, but allow you to develop a business that can competitively compete in global markets.
BHD have been working in this area for many years and we would like to bring our knowledge and experience to your business. To work with you to enable your business to play on the global field with confidence that you have strong financial backing and the ability to tweak your strategies quickly and effortlessly.
Contact Us for a quick discussion on how we can help you to implement and use technology to improve expense management as well as other parts of your business that cause you pain.