Expense Management: from efficiency to effective procurement 2018-05-23T14:34:39+00:00

Free HR briefing paper

Expense management – from efficiency to effective procurement

Expense management: From efficiency to effective procurement

Introduction

Travel, entertainment and other non-PO expenses represent a significant outlay for most organisations, but many concede that they exercise poor control over their expenditure. Frequently relying on in-house spreadsheet templates to capture and allocate expense data, their processes are often time-consuming and inefficient, and many struggle to enforce employee compliance. Above all, while they actively seek out economies of scale in other areas of procurement, many organisations are missing the opportunity to analyse their expensed outlays and consolidate suppliers.

This Briefing Paper assesses the business case for investment in expense management systems as a means of tackling some or all of these issues. Taking a pragmatic perspective, it argues that:

  • Expense management systems allow organisations to improve control and compliance by automating several key aspects of policy enforcement.
  • Automated systems also deploy workflows, ‘self-service’ capabilities and web-based access to improve the quality of data and reduce administrative overhead.
  • Automation generates a wealth of electronic data that can be used to better analyse expenditure. With a centralised, enterprise-wide understanding of aggregate spend and the ability to drill-down into the major areas of expenditure, organisations can reduce the number of suppliers used and strike preferential volume deals with preferred partners.
  • This data also helps organisations reassess the total costs associated with other activities such as off-site training, and may establish a business case for changes to working practices.
  • Successful implementation of an expense management system rests, among other factors, on employee buy-in. Organisations are advised to take a pragmatic approach that focuses on the tangible benefits for individual users of the system, including greater convenience and the possibility of faster reimbursement.
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