88% of businesses are investing or planning to switch to automation in the future. But why?
Nearly three-quarters of business leaders recognize that employees save up to half the time previously spent on manual tasks due to digital automation. For example, our data shows that Webexpenses’ expense management system saves users an average of 3 hours per claim.
But business spending goes beyond just T&E - and so should the software to manage it.
Simplified, there are two basic types of business spend: personal spend and operational spend. So what’s the difference and how do you automate all spend across your business?
Employee spend and expense management
What counts as reimbursable employee spend?
Employee expenses are the goods and/or services for which your employees claim on a regular basis. Often referred to as T&E, employee spend accounts for travel and entertainment - or travel and expenses.
Common expense categories include:
- Train/plane journeys
- Mileage reimbursement
- Staff uniform
- Home office supplies
- Food and beverage
- Client entertainment
For example, a salesperson travels 30 miles to meet a prospect. They drive their own car, pay to park, and then take the prospect out for lunch using their personal credit card. The salesperson would then submit and expense a claim for the mileage, parking, and lunch.
On the other hand, an account manager, whose job is to build client relationships, may have a company card to cover client entertainment expenses like food, drink, and activities.
In each scenario, the employee would be required to submit their expenses. The salesperson would need to submit their expenses for two reasons: the first of which is reimbursement for the out-of-pocket - personal - expense.
And in both cases, the employees would have to submit spend to the company to maintain effective expense management. Although the account manager does not require reimbursement, they will still need to submit expenses so that the company can keep track of the spend for tax, audit, and visibility and forecasting purposes.
So, how can your business automate its expense management process?
Businesses can switch to an automated process using an expense management system. Many expense management systems include an expense app that users can access to submit and manage claims on the go which simultaneously allows approvers to view, track, and approve claims.
There are a variety of expense management systems that you can choose from. And even more reasons why businesses should start using a digital tool for their expense process. An expense management software provides automated processes through features, like:
Built-in expense company policy:
- Policies defined at the point of entry
- Automatically flag, remove and avoid errors
- Reduce duplications and overpayments
Digital communication workflow for:
- Structured approval chain for fast, remote approvals
- Increased visibility for the entire business
- Managed spend limits and correct authorisations
- Automatic notifications to approvers and users
Cloud-based audit trail:
- A 100% paper-free process
- Accurate allocation of costs
- Maximize tax reclaim for all expenses
Operational spend and invoice processing
What is operational spend?
Operational spend refers to “an expense required for the day-to-day functioning of a business.” Unlike employee spend, operational expenses are a set of costs that are necessary for a business to run.
A few examples of operational expenses include:
- Office equipment
- Office maintenance
- Supply chain and procurement
- Third-party vendors
- Marketing ad campaigns
- Printing costs
- Shipping costs
- Building materials (for construction)
For example, a car manufacturer depends on its supply chain to ensure operations run at full capacity. Approximately 30,000 parts go into every Toyota automobile, such as the radio, dials, and upholstery. The various parts are ordered and shipped in from different suppliers. Each of these suppliers require a purchase order. Once received, these invoices need to be paid in order to continue the supply chain and continue production.
So, how do you automate invoice processing to keep your company on track?
Implementing an invoice processing software allows your business to automate the process - from PO request to invoice, to invoice delivery into your finance system, all the way through to approval.
There is a selection of AP automation systems available for your business to choose from. These systems support your business in automating manual processes in the following ways:
Integrates with your existing finance systems:
- Easily connect to your existing ERP
- Eliminate manual rekeying
- Accurate data across both systems
Report on operational spend:
- Gain valuable insights into invoice spend
- Analyze financial data
- Improve forecasting
No more manual tasks:
- Spend more time on important tasks
- Save 20 minutes per invoice
- See a reduction in ordering time by 95%
5 reasons why should you automate all of your business spend management
Although employee and operational spend are managed within different categories of business expenditure, they share similar points and challenges that can be effectively managed through the same method: digital systems.
These automated systems share five ways businesses can benefit when automating expenses and invoice processing:
1. Greater control and stronger reporting
With an automated process in place, businesses can control, manage and report on both processes with accurate, reliable data.
For expense management, an automated process allows your business to set up categories, cost centres and spend limits. Finance teams can utilise features, such as the Webexpenses dashboard, to analyse company spend; giving insights into your top 10 categories and spenders, spend forecast and time to review.
Similarly, with AP automation, businesses can set up suppliers, correct approvers, and capture all invoice information with the click of a button. Users will also have access to a range of financial-based and activity-based reporting to gain insights into invoices pending, invoices approved/denied and supplier spend to date.
2. Improved visibility and compliance
Both expenses and IP share the same level of visibility in terms of who approves each cost. With Webexpenses expense management, up to 6 approvers can be set up for each claimant and for IP, authorisations are set up based on the supplier.
This setup increases visibility over business expenditure and guarantees stronger compliance. Also, it ensures employees have a clear indication of what costs they manage across the entire business - diminishing second-guessing, inaccurate data and late payments/reimbursements.
3. Save time and money
Finance teams are at the core of business spend. And for such an important part of business success, the jump to automation should be an easy decision.
Many businesses feel they are “too busy to automate” and hence hesitate to switch to a new system. However, in the long run, by choosing a digital business management partner, like Webexpenses, your business can save a significant amount of time and cost to inform, train and ensure employees are comfortable with the systems in place.
4. Boost employee satisfaction
72% of AP teams are unsatisfied with having to manually input data. Sound relatable?
M-inc says: “Automating tedious tasks is a surefire way to help your employees become more productive, happier, and feel more appreciated.”
Having multiple systems, with different providers, can raise more challenges, complications, and affect the same users across the business. Challenges include: lack of support, minimal training and less time to fix ongoing issues.
Think about every time a new system comes into place - employees tend to put off learning the new software if they don’t understand the benefit to them. Now imagine implementing two (or more) systems through one provider with access to a support team, a dedicated account manager, and personable training to suit all users across your business.
Ultimately, if your Finance team is unsatisfied with the systems in place, it’s likely that the entire business will be affected - including approvers, admins and end-users. So, when thinking about employing a new system, consider targeting all areas with ongoing challenges and choose a provider who can offer exactly what your employees are looking for.
5. Ditch the paper and empower remote workers
With 46% of UK businesses on target for carbon neutrality by 2050, and big, global brands such as Amazon aiming for 2040 and Apple by 2030, it makes sense now, more than ever, to digitally transform your finance processes. What’s one easy way of doing this? Automate your processes and remove the need for paper. This will speed up processes and improve your business’s carbon footprint.
Automation is also important for remote workers. As many employees are already unsatisfied with manual tasks, it’s even more challenging for remote workers. With less face-to-face interaction, remote teams can struggle with collaboration. However, with automation in place, businesses can realign teams together and improve collaboration and creativity.
Now, the question is: If you’re not within the 88% that are ready to automate, why?
Expense management and invoice processing go hand-in-hand. Simplified, one manages employee personal spend and the other manages business’s operational spend. Automating the two together will save you twice the time, money, and paper.