Build your business case. How much can you save on your expense reporting process?

Transcription

1 Build your business case How much can you save on your expense reporting process?

2 How much can you save on your expense reporting process? Contents 03 Introduction Build your business case 04 How we calculate your potential cost saving Other studies 06 Do we exaggerate? 07 Conclusion Page 02

3 Introduction Efficiency and productivity are important for every business that is facing competitors. At the same time, finance departments are always looking for opportunities to cut costs. The expense reporting process can be an opportunity to realise cost saving. Several studies have been conducted on expense management. They all conclude that significant time saving can be realised with an automated expense management solution. And after all: time is money. The costs for people spending time on tasks are called hidden costs. VCK Travel has researched the hidden costs of expense reporting. They conclude that organisations spend on average 45 minutes on the entire process of an expense, from booking and reporting, to approving and processing. American Express Corporate Services on the other hand argues based on their research that the process is the multiple of 45 minutes. The difference can be explained by the fact that in the study of VCK Travel the respondents were mostly management assistants. They might not have enough insights into the processing to make an accurate estimation. 60% savings on each expense report processed in the cloud Contrary to these two studies, the Aberdeen Group has analysed the expense reporting process without the booking time. They conclude that businesses that use a cloud-based expense management tool reduce their expense-processing costs by 60% to approximately $ 7 per expense report. Taking into account these studies, and based on our own experience and the knowledge of our own solution, we have developed a cost saving calculator. On you can calculate the estimated yearly cost saving you can realise if you switch from expense reporting on paper to expense reporting with SRXP. In this whitepaper we outline the formula and rationale behind the calculator. Page 03

4 Build your business case How we calculate your potential cost saving Underlying premise The calculator is constructed in such as way that the first expense per month is the most expensive one. After all, attaching a second expense to an expense report does not cost that much more time than submitting the first expense, for which you have to start the expense reporting process. Hidden costs of submitting an expense report On paper = Expenses * 1 minute + 10 minutes SRXP = Expenses * 0.5 minute + 6 minutes Estimated salary of an expense reporter: 30 per hour Estimated salary of an expense reporter: 30 per hour = Expenses * = Expenses * It takes 10 minutes to get or print an expense report, fill out the general details and submit it to the approver. Every expense costs 1 minute to attach. This is the time for sorting out the receipts, looking up the mileages and filling out the expense details. Filling out the expense details takes 30 seconds per expense. Creating, adding the digital expenses and submitting it to the right approver cost 6 minutes. SRXP is able to realise this cost saving because of the mobile expenses app. It can be used to capture receipts and quickly add the expense details, create mileages expenses, and report duties and hours. In the online portal, the expense reporting can select the expenses and add them to a report. When clicking the submit button, the report is automatically send to the approver assigned to this expense reporter, thanks to the automated workflows. Page 04

5 Hidden costs of approving an expense report On paper = Expenses * 0.5 minute + 5 minutes SRXP = Expenses * 0.2 minute + 1 minute Estimated salary of an approver: 60 per hour Estimated salary of an approver: 60 per hour = Expenses * 0,50 + 5,00 = Expenses * 0,20 + 3,00 Every expense takes 30 seconds to check. Next to that it takes 5 minutes to sign the report for approval or provide feedback for rejection. The approver might have to bring the paper report back to the expense reporter. Checking the expenses only takes 12 seconds, and approving or rejecting the report only costs 1 minute. By using SRXP, the approver will save time on checking the submitted expenses in two ways. As a start, SRXP performs the first check with pre-set business rules. For example, the expense details are always filled out because the expense reporter cannot submit the report without them. The approver does not have to spend his or her valuable time on such basic checks. Second, reports are approved with just one click, and rejecting the report with some feedback is a quick to-do as well. Therefore, the bottomline time spent on a report is minimal as well. Hidden costs of the administrative processing On paper = Expenses * 3 minute + 6 minutes SRXP = 2 minute Estimated salary of an expense reporter: 25 per hour Estimated salary of an expense reporter: 25 per hour = Expenses * 1,25 + 2,50 = 0,83 Manually copying the expenses into the administration costs around 1.5 minute per expense. They have to be There are no extra minutes per expense because all expenses are digital anyway. It only takes 2 minutes to Page 05

6 booked on the correct cost centres and GL accounts. select all the reports and export them to the administration at once. Because all expenses are already digitalised in SRXP, they do not have to be manually typed into the administration. The receipts don t have to be scanned or otherwise manually archived. Based on the expense details filled out by the expense reporter, the expenses are booked on the right cost centres and GL accounts. Because of the integration of SRXP with your ERP, the time of processing does not increase as the amount of expenses or reports increases. Costs for using SRXP The costs for SRXP are 3 per user per month, while there are no obvious costs for expense reporting on paper. However, as the calculation shows, the difference in hidden costs of the time spent makes up for this small investment. Other studies Do we exaggerate? You might think that we exaggerate the minutes spent on an expense report but actually we are quite conservative. International Card Services, a credit card issuer, conducted research into the minutes it took to submit and process one expense. These are the results: Number of minutes needed per expense for the expense reporter Number of minutes needed for the manager and administration to process the expense Minutes per expense Percentage of companies Minutes per expense Percentage of companies 1 4% 1 11% 2 3% 2 4% 3 6% 3 6% 4 3% 5 43% 5 35% 10 19% 8 1% 15 9% 10 25% 20 3% 15 14% 30 1% 20 4% 60 4% 25 1% 30 3% 60 1% Therefore, the potential cost saving might even be higher than is estimated by our saving calculator. Page 06

7 Conclusion The expenses app, automated workflows, business rules and integration with your ERP are all aiming for the same objective: to reduce time spent on expense reporting. This applies to expense reporters, approvers and finance departments alike. A paper expense reporting process has high hidden costs. An expense reporting solution like SRXP can realise a cost saving of 50% to 60%. Reducing the time spent on expense reporting allows employees to focus on what really matters. Cutting costs on administrative processes allows you to redirect resources to more valuable purposes. Productivity will rise as employees spend less time on administrative hassle and have more time to focus on increasing the profitability of their organisation. Resources Aberdeen Group (2013) Your 2013 Guide to Travel and Expense Management Aberdeen Group (2013) The Travel and Expense Management Guide for 2014: Trends for the Future International Card Services (2015) Roadmap naar renderend declareren Benchmark zakelijk kosten (Roadmap to remunerative expense reporting Benchmark corporate expenses) VCK Travel (2016) De weg naar kostenbesparing: Benchmark corporate travel management (The road to cost saving: Benchmark corporate travel management) Page 07

8 Try SRXP - free See it for yourself Are you curious about SRXP s efficient expense reporting solution? You can create a free account on portal.srxp.com/signup. Why SRXP? SRXP relieves you of administrative hassle of expense reporting. We offer a mobile app for every platform and an online portal for an automated and streamlined expense reporting process of course integrated with your ERP. No more lost receipt, time saving for everyone involved, and full visibility and control through real-time insights. Or get an online demo first Even better: start with an online demo. We will share our computer screen and show you the easy workflow and the features. Schedule your online demo at SRXP Mobile Expense Reporting Science Park XH Amsterdam sales@srxp.com