A Chief Financial Officer’s primary responsibilities include reporting accurate financial data, developing financial strategy and reducing expenditure. In short, they’re directly in charge of improving the company’s financial results. Business value is created by not only ‘crunching numbers’ but also improving business processes.
When we talk about Travel & Expense, the policies are the main tool that helps organizations keep a check on expenditure. However, a stat that might shock some is that false expense claims account for 15% of the total money lost by fraudulent activity. Not just that, expense visibility is a myth and it is impossible for a CFO and his team to ensure compliance.
This blog post focuses on the problems faced by CFOs in the domain of Travel & Expense and how EaseMyExpense solves it.
1. Cost associated with Travel and Expense
There a lot of ways of going about reducing costs associated with travel and expense. For instance, it was observed that most employees engage in ‘bleisure’ to boost morale before an important client meeting/site visit. However, most organizations do not have a formal ‘bleisure’ policy in place.
However, it is important to note that policies can only affect finances positively if they are being complied with. Most organizations bypass compliances because of the ‘urgency’ of the expense. Since most of the efforts towards cost-cutting are scattered, it is not feasible to expect any tangible results. Compliance solves the issue of cost.
EaseMyExpense’s automated rule engine maps the company’s policies into the back-end enabling automatic rule checks against every submitted request. The amount of time spent filing, reconciling and auditing these expense claims can be alternatively used by the respective departments involved to go about their KRAs and KPIs.
2. Lack of visibility
You cannot control what you cannot see. It’s true, part of why Travel and Expense have become such a huge pain point for Finance stakeholders is because they lose track of what is happening. The time span between submission and approval of an expense report causes huge uncertainty for the Finance Department and field team alike.
Most CFOs agreed on the fact that their teams spend too much time reconciling data. A platform which agglomerates all data into one place will only help them model the finances of the organization better. Every receipt has its own GST slab which needs to be calculated separately.
EaseMyExpense provides a flexible structure that incorporates all different aspects of an organization. The Group, Company, Location, Branch, Department and even employee can be drilled down to better analyze data. All data is fed in real time and there is no delay caused by submission and approval of the report. Everything is inside the system (including data on pending reports). The accounting process is also streamlined.
3. Complex Organization structures
In most medium to large-sized enterprises, the approval workflow is extremely complicated. For instance, a single employee can have multiple levels of approvals for different expenses, as well as, multiple approvers at the same level. The policies that are drafted after an endless number of man-hours of research go to waste when policy compliance is not there. Statistically, 70% of the employees have at least one policy violation in their expense report.
An interface where data is directly pipelined to the right individual becomes essential at this stage. What EaseMyExpense does beautifully is that it feeds the entire organization structure into the system beautifully through Microsoft Excel Integration. Once your back-end is ready, seamless expense creation, approval, and reimbursements will follow. Our analytics tool gives CFOs and other stakeholders unbelievable 2-3 leveled drill down into data to make better decisions. Auditing and compliance are no longer issues.
One of the most fundamental lessons in finance is that money cannot disappear from the economy, it only flows. When provided with the right tools, CFOs can take charge of Travel and Expense in their organization and turn it into an asset. Cutting on trips is not the solution, considering the ROI of business travel is calculated at $12.50 per dollar invested. The only way forward is to optimally utilize your resources.