In the past few decades, technology has transformed the business sector almost beyond recognition. Innovation in technology has brought several changes in the way organisations function today. But there are still some processes where companies struggle to convey efficiency through technology. Expense management is one of them. Despite digitisation, most companies still function on the old system of filling employee expenses, which requires manual entry of data. Between the time data entry happens into the system and reconciliation is done, there is a delay of almost month and a half, on an average. Sometimes, this delay is even more.
Efficient expense management tool with enhanced features, like spend visibility, play an important role in converting huge travel and expense (T&E) data from various sources into smart manageable data. What this essentially means, is that organisations will have real-time insights into employee spends.
For example, let us assume you manage a sales team of 70 people. This team travels frequently to meet potential new clients, maintain existing relationships to achieve and exceed their targets. Their largest expenditure is on Travel and Entertaining expenses. Spending is not really the challenge though, it’s the tracking. They do not submit their expenses claim forms, after each travel. Instead, they do it together mostly 1 day before the cut-off date. You can’t really blame them for this, their priority is to generate leads and meet their sales targets. In their mind, they can claim expenses, whenever they get free time. But, this expense hits you as a surprise, at the last minute, sometimes, at the end of the quarter — taking the forecasting or “budget Vs actual” analysis out of balance and lands you in a difficult position. Imagine, if you have a mechanism that would give you real-time visibility of all expenses.
It would help project the expenses accurately. It would also help you in taking corrective action if the budget is exceeded. You can approve requests for cash instantly, track how much money is being spent, pursue a new client or maintain an existing client to ensure cost-effectiveness and providing the opportunity to make adjustments if needed. In addition, this can further be used to improve efficiency in the way you manage your business, with appropriate tools, you can set a daily or monthly limit for travel expenses on each employee’s card and ensure that expenditure is not exceeded.
However, what if you are told that an efficient expense management process is only one side of the “Efficiency” coin. The other side is Spend Visibility. You would be wondering what Spend Visibility is. Right? Let us understand it using an example.
You have an assigned budget for office supplies. In the 3rd quarter of a year, you realise that your old printer has given up and you need to order a new one. However, you are not sure on what portion of your office supply budget has been spent and if you have enough budget to order a printer. In absence of Spend Visibility, most organisations go ahead and order the printer and without realising that they have exceeded their office supplies budget.
Spend visibility is your window of opportunity to track the entire procurement cycle. It provides a systematic access to data related to every step in the procurement cycle. With Spend visibility, you can get a well-rounded view of how money is moving through your company.
With smart systems around managing expenses on one side, and providing visibility to expenditure on the other side — that too real time, you would be strongly positioned to take your business to the next level.
Content Originally Published Here.
