In the early days of business, the admin side of things can seem so simple. You have a small number of employees, basic setup and all resources needed to handle any paperwork.
But, all too often, the systems implemented to cope with the early stages of a company will begin to seriously struggle as that business starts to grow in size and complexity.
Without robust and scalable company structures, growth can start to pose some significant risks as companies find themselves fighting against failing systems and uncontrollable costs.
It’s one of the factors that make growing a business such a challenge:
- More than 60% of small businesses in Australia will fail within the first three years, according to the Australian Bureau of Statistics.
- Only a third of US companies make it to their 10th anniversary.
- It’s estimated that only around 40% of new UK start-ups survive past the first five years.
A common pitfall, as a business moves forwards, is a failure to effectively manage expense reimbursements. It’s a particular risk for those companies that use traditional methods to handle their employee costs.
The majority of businesses are still managing employee expenses via a combination of form-filling, Excel spreadsheets and manual processing.
It creates a slow and clumsy work process with finance teams having to deal with a monthly flood of claims and corresponding paperwork. The inherent problems, however, are unlikely to show themselves until the company starts to grow.
As the workload increases, the weaknesses begin to be exposed. Admin staff will find themselves battling against a backlog of expense claims – not having time to properly check they’re legitimate.
Errors and acts of dishonesty are likely to go unseen and with little fear of being caught, fraud can quickly embed itself within a workplace culture.
False invoicing is the second largest cause of workplace fraud for Australian and New Zealand businesses, contributing to estimated losses of $345 million each year.
This lack of control over costs also heightens the risk of external compliance breaches, particularly with any tax-related information provided to the tax authorities.
Digital expense management
Businesses are turning to digital solutions to safeguard against these risks. A cloud-based expense management system such as Webexpenses is designed to handle the dynamic demands of a growing company.
Employees are provided with a smartphone app which converts any paper receipt they receive into a digital image. It allows expenses to be managed via fast, automated and paper-free processes.
A company that switches to Webexpenses from a traditional system will typically reduce processing times by 25% and reimbursement costs by 10%.
With manual tasks and number crunching removed, finance teams can remain fully focused on managing costs. They have the time and resources to properly enforce policies and challenge suspicious costs.
It provides a framework with the flexibility to grow with a business – it’s able to handle everything from the simple demands of a startup to the multinational complexities of a global corporation.
So while expense management may not seem a high priority for a company that’s looking to scale-up, it’s one of those areas where it really pays to future-proof. Inadequate and overstretched expense systems are growing pains that modern businesses no longer need to endure.
Webexpenses provides a smarter way to manage employee expenses. Learn more and request a free demo here.