Nowadays almost everyone is familiar with spreadsheets. The variety of tasks that they are used for makes them a must for any business, small or large. A simple Google search and you will find scores of spreadsheet templates for virtually any business function.
Because of such availability, managers tend to develop business processes that rely heavily on the use of spreadsheets without any cost-benefit analysis. Today, we want to take a step back and look at the costs associated with their use in the context of expense management.
The tedious manual process
Often, the CFO builds a well-designed expense report spreadsheet that employees use to report their expenses. First, the employee fills in the required information. Then, he prints it and attaches receipts to the hard-copy form. Finally, he submits the report to his manager and waits for it to be approved.
On the other end, the finance team has to enter data manually into their accounting system. Then exports the data to another spreadsheet in order to analyze it and get insight into spend.
It is easy to argue that this solution is tedious and error-prone. Automating the entire process, rather than using a collection of spreadsheets, will enable businesses to reduce costs and save valuable time.
Lengthy reimbursement cycles
As the company grows and the number of employees increases, the amount of time it takes to process expenses and reimburse employees get longer and longer. Such delays can rapidly lower employees’ morale and frustrate the finance team.
Quickly, the shortcoming of a spreadsheet-based solution becomes apparent. Yet, managers are often reluctant to explore other solutions and prefer to maintain the status quo. Frequently, we hear excuses such as “We know the current system is inefficient and costly but we are used to it.” In this case, stepping out of their comfort zone and checking how other systems may benefit their organization can pay off big.
Poor spend visibility
A comprehensive insight into spend is crucial for expense budgeting. However, a spreadsheet-based system is not really suited for such task. With a collection of spreadsheets and piles of receipts, it is hard to consolidate purchases and to track compliance with the company’s spending policy.
Here, a cloud-based software will do the job perfectly. The CFO will be able to gain a better understanding of the spending, which can unleash many saving opportunities. For instance, he can leverage volume purchases to negotiate better deals.
A good return on investment
It is by far more costly to manually process expense reports. According to a recent survey conducted by Paystream Advisors, the average cost of processing one expense report varies depending on the level of automation. On average a business spends $21.41 to process each expense report if their process is entirely manual. However, companies that fully automate their expense management process spend only $8.50 per report, a saving of almost 60%. Here at Keepek, we believe we can help you drive this cost down even further.