SMBs Need To Automate Expense Management
While SMBs are adopting various tools and technologies to ease their operations today unlike before, one critical area where they have not automated is expense management. According to Concur’s SMB Survey, majority of SMBs rely on manual solutions that do not meet needs for flexibility and productivity. Others use outdated expense management tools.
In any case the small and mid-sized companies use expense management solutions that often contradicted employee needs and policies, as well as compromised overall profitability.
Concur asked more than 200 SMB financial decision makers questions related to expense, travel, and invoice and was able to identify employee needs such as greater flexibility, automation, and incentives for compliance. However an array of frustrations exist.
“SMBs face enough challenges as it is without having to worry about spend management capabilities,” said Jerame Thurik, CMO for Concur. “Upgrading their tools from outdated to automated is the best way to reduce costs, boost bottom-lines and help SMBs focus on what matters most – the success of their business.”
According to the survey, employees expressed an overwhelming need for faster turnaround on reimbursements. Other important needs include having a flexible travel and expense program and automating expense reporting to reduce time spent on administrative efforts.
While these SMBs are aware that automating expenses decreases the cost of expense claim transactions by 75 percent or more, and reduces the time to process expenses by 35 percent, seven out of 10 SMBs in the survey said they do not currently utilize expense management software. SMBs continue to use a combination of outdated expense methods, as 38 percent rely on paper-based submissions, 26 percent use corporate cards and 23 percent use Excel sheets.
Nearly eight of out 10 SMBs in the survey said they have corporate travel policies in place, but expressed the need for, flexibility in booking choices and incentives for complying with travel policy.
With travel management, a supplier-led approach can capture the 40-50 percent of hotel bookings and the 28 percent of air bookings that are considered blind spend, or “leak”, when employees choose to book outside of policy.
In case of automated invoice solutions, the research shows that businesses can reduce invoice-processing costs by between 40-70 percent through automation.
SMBs seem to recognize this benefit, as the majority of them are utilizing automated invoice solutions and reporting benefits. Seven out of 10 say they use invoice software to keep their finances in order, expressing they enjoy key benefits such as a reduction in paperwork and increased overall productivity.
The researcher of the report believes that automation is the way to go. Or example, SMBs contribute more than $5.5 trillion annually to the US economy alone, it says Yet only about half of those businesses survive five years or more, and only one-third makes it to the 10-year mark.
According to research firm Ardent Partners, the key differences between long-term success and failure for SMBs experiencing rapid growth are how well they manage cash flow, and the infrastructure they have in place to support their growth.
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