April 23, 2016
Exclusive new survey shows true cost of managing expenses for US businesses
Manchester, UK, April 19, 2016 – Conferma has issued exclusive new research demonstrating that the average large US business is paying over $1m in managing their corporate expenses. Research for the leading virtual card numbers providers—carried out by Opinion Matters—is able to reveal that the multiple inefficiencies in how big US business manage expenses is proving a significant hit on their bottom lines.
In the US, there are in excess of 30,000 businesses with more than 500 employees, with an average annual cost of expenses management of $1,075,000 per business. Conferma can reveal that the total cost reaches a staggering $32.9bn.
Simon Barker, CEO of Conferma, explained, What we are seeing here is billions of dollars being lost thanks to a confused landscape of multiple employees using multiple ways in business to claim expenses. It is costing US business time and money to navigate this landscape and should be subject to much more rigorous control and oversight.
With the surveyed businesses having an average of 328 members of staff authorized to make purchases, managing these multiple expenses streams is proving expensive in terms of both time and money. About 66% of chief financial officers believe that current processes are too time-consuming and 58% believe they are too costly.
All of this confusion adds to an incredible 90% of chief financial officers admitting that it is difficult to reconcile payments on cards used by multiple members of staff.
Simon Barker added, Companies have to pay expenses; it’s a critical part of business life. Yet there is no additional reason why companies should face operational inefficiencies and excessive business costs. If something is difficult to do, it will cost time and money. And employees face unnecessary difficulties too; they have to remember to keep receipts, fill out expenses claim forms and then wait, sometimes for weeks, to be reimbursed by their employers.
One way in which management costs could be tackled is through the increased use of technology and automation. And this is something chief financial officers agree on. When it comes to addressing these problems, 90% of the chief financial officers who were surveyed point to employees being able to make purchases on mobile devices as a possible solution. As a further indication of the willingness of businesses to explore new technology to reduce cost and drive efficiencies, 40% of chief financial officers identified them as being able to help solve the concerns they had over expenses management. This rises to 49% of chief financial officers working in the financial services industries.
Simon Barker concluded, The technology exists to help solve these problems. With innovations in banking technology and FinTech, there are ways in which a previously complex system can be streamlined and automated. In the mobile channel, for example, there are methods of integrated receipt capture, making the whole process seamless, intuitive and paperless. It saves on employee time in submitting expenses, saves on company time in processing those expenses and saves on the substantial overheads in managing the system.
With an average of $1m at stake each year, companies must start looking at simplifying their expenses.
Here are the full results from the survey: