With increasing pressure on CFOs to shave off (yet another) 5-10% of spend each year (!), what better way than to look at expense management and procure-to-pay solutions?
Finance leaders around the world are reimagining their future. They are looking at ways to be true business partners to the CEO. Ways in which Financial insights can shape their organization’s strategy.
Enterprises all over the world are struggling with spend reduction and control of expenses.
While automation of procurement and accounts payable has been an area many organisations have already tried out, e-Sourcing is now being tried out first time by many enterprises.
ERP (Enterprise Resource Planning) has been the cornerstone of several small, medium, and large sized businesses for many years now. ERP acts as the aggregator accounting platform of choice for companies, but some may agree that its flexibility is questionable.
The title of this blog is the question we are asked very often at Expenzing. Recently, the CFO of a large corporation asked us; this was after his team presented him the shortlisted Expense Management Solutions. No points for guessing, we were one of them, while the other was an international product.
Industries are witnessing rapid innovation in technology that are impacting businesses at various levels. From digital payments to online processes every business is moving towards becoming more agile. The roles, duties and expectations from each department is evolving as they adopt to this new order. The Finance and Accounts Payable units led by the CFO are adapting to keep up with technology.
When any business starts it is imperative that it acquires assets. It begins with laptops, office space, furniture and so on. This analogy is much simpler than the on ground reality, which is – businesses have been functioning for many years and they have over time acquired multiple assets (hundreds and thousands) across branches across the globe. What does it all lead to?
A pilot sets the air carrier on auto pilot reaching optimal conditions after take-off and setting the trajectory and coordinates for its journey. He monitors the flight without constant hands-on human control. Similarly, has the time come to automate the age old procurement systems in your organization? Across industries, organizations are faced with the fact that procurement can be a tedious process.
Procurement has traditionally focused spend management efforts on their firm’s largest suppliers, the vital 20%. These efforts have produced the expected returns but years of cost cutting with large suppliers have squeezed out most of the savings to be gained. Pete Loughlin wrote in Purchasing Insight that ignoring tail spend is potentially leaving huge amounts of money on the table.
Do you believe that compliance policies are actually roadblocks to achieving your objective at work? A majority of us will agree to this, at some point when we have faced an issue and confronted the accounts payable team. The common grounds for claims rejection are “not as per company policy”, while the employee’s response is, “Where is the expense policy published, had we known before we could have avoided the said expense?”
Each large organization prefers centralizing procurement and payments. Yet, most are not able to do so. Procurement teams and Accounts Payable (A/P) teams struggle to streamline and centralize. Let’s explore the key reasons for this.
Imprest is a sum of money that is kept in each location of an organization to take care of small expenses that inevitably need to be paid for immediately in cash. The quantum of this Imprest or Petty Cash that is kept at each location can vary from as little as a few hundred to several tens of thousand, based on the scale of expenses incurred there.
I met a highly respected and progressive organization last week that was trying to get over a vendor relationship problem. Some of their vendors were unhappy in spite of the company placing a lot of importance on their vendor relationships, treating them as partners, and investing in training their Accounts Payable teams on interpersonal skills and sensitizing them to the importance of collaborative relationships.
I was intrigued by an article on business travel spends in the latest issue of the Economist. (Full article here.) The article calls out that in spite of advances and adoption of collaboration and communication technology like videoconferencing and Skype, business travel is increasing pretty much across the globe.
Recently we came across an article in a business daily about a reputed company alleging that one of its key senior management professional had claimed fraudulent fuel bill reimbursements. The spat between the company and the senior professional points to what could potentially be a big risk to the reputation of the organization.
You need not read this article if your company uses a cloud-based, mobility-enabled expense management software. Wonder why? Because such software meticulously takes care of everything discussed here. Sadly, more than two-thirds of companies are yet to migrate to such a model. They still depend on spreadsheet-based system or manual systems for expense reimbursements.
This is a conundrum faced by many organisations. An employee submits an expense report of USD 450. A/P feels that USD 390 is the justified amount which can be reimbursed. In some companies A/P edits (reduces) the amount and reimburses. This however has the drawback that employees learn to pad up expenses since they know that A/P is possibly going to reduce the expense amount. Continue reading
For many organizations, expense management involves punishing paper-work and numerous cross-checks, not to mention the negotiations! As geographical boundaries expand, companies must focus on fine-tuning their expense management processes. The way to do it is by automating expense management. Here’s why.
Travel is usually one of the largest uncontrolled areas of business spending and thus, it becomes crucial for an organization to take charge of its travel expense costs. While controlling costs are important, it’s also pertinent to identify and encourage intelligent options that streamline processes and improve efficiency and employee satisfaction.
Expense management in most organizations is either spreadsheets or email based. In some cases, you might even find expense management being implemented manually. However, none of them have really simplified the work, and the tasks remain highly tedious.
Recently I had the opportunity to do one of the key note presentations at the CFO Leadership Summit 2015. I spoke on a range of issues that keep CFOs awake. One of the main issues is Controls and Compliance. As a company specializing in expense and procurement management we have very deep experience in this area.
However much we may want to wish them away, expenses are a part of the basic operations of an organisation. People have to buy supplies, travel, visit suppliers or clients, work late and hire cabs to get somewhere. There are many low value spending decisions that are taken by a large number of people often frequently. So the economic effect of all these decisions can be quite large. Management
On a recent visit to Colombo I travelled by public bus and paid the conductor for my ticket but did not get one. I was thinking about the great public transport scam that I was now a party to before I realised that no paper tickets were being issued. The transport corporation had done away with the little stubby tickets and rely on the conductor to control ticketless travel.