Why connected spend means BIG benefits for smaller businesses too

| 04-10-2017

Consolidating spend across travel, expenses and invoices might sound like a complex process more suited to enterprises. But in fact, this surprisingly affordable and scalable approach can deliver big benefits for smaller businesses too…

 

Our recent survey on spend management among finance leaders highlighted some of the key concerns among businesses with 10-500 employees today. For starters:

 

  • A third (33%) of organisations say their travel, expense and invoice spend usually or always goes over budget every financial year
  • 20% say they only some or no visibility over expenses, and similar proportions have only some or no visibility over travel spend (23%) and invoices (17%)
  • One in five (20%) say they are mostly or somewhat inefficient at managing financial compliance

 

Process inefficiencies, compliance concerns, busted budgets… It’s clear from our results that, while 90% of smaller businesses agree that it’s vital to have control over spend management, for many there are still a lot of challenges to address in this area.

 

Connecting spend via a cloud-based platform may sound like a complicated thing to implement, but actually it’s surprisingly straightforward and brings many benefits, especially for smaller businesses. As the following reasons suggest, the question to ask is perhaps less ‘why should we do this?’ – and more ‘can we afford not to do this?’

 

Maximise cashflow with greater visibility and control

Nine out of ten smaller businesses say they reclaim less than 100% of their eligible VAT on travel and expenses costs, while 59% reclaim less than 50% of what they’re entitled to. When you’re trying to reconcile employee spending and stay within budget, reclaiming VAT becomes less of a priority. This is just one way in which poor spend management leads to money being thrown away.

 

Having a strong handle on cashflow from month to month, and even day to day, is vital in a small business. Connected spend management can make sure you don’t pay out unnecessarily for inaccurate claims, you reclaim the monies that are due to you, and you can address problem spend patterns before they get out of control. All of which means that you waste less cash and you can see exactly how your bottom line stands at any point in time.

 

Save time, resource and money by cutting manual data capture

Smaller business say their top finance challenge is time-consuming data capture. The chore of managing manual, paper-based processes also features in their top three finance bugbears.

 

Manually inputting three kinds of data in separate processes – even if it’s something as simple as Excel spreadsheets – is a clunky and laborious task. As well as the possibility of human error, it’s hard to mine the data for patterns and predictions, and any compliance or personnel updates have to be applied manually too. All this takes an avoidable amount of time – time which could be better spent by staff on other, more profitable activities.

 

Use connected spend to help set you up for growth

Using spend management software as a service is a great hack for a smaller business targeting growth too. The solutions scales as you grow, and aligns with your financial performance.

 

Save on IT resources with spend management as a service

As well as avoiding clunky on-site tools and time-consuming installations, a cloud-based approach to spend management is cost-effective in other ways too. You avoid installation fees and other upfront fees, and patches and upgrades are applied automatically too.

 

Keep on top of tax and compliance changes almost in real time
A spend management system can automatically update employee tax codes and adjust spend reporting in line with changes in compliance regulation. That means more time saved on manual updates, and peace of mind that you’re ahead of the regulatory curve too. 

 

Take human error and personal issues out of the spend management equation

In smaller businesses, personal relationships can sometimes get in the way of efficient spend management. If the person who signs off your expenses is also a close friend, for example, there’s a chance they may tempted to turn a blind eye to an excessive or even fraudulent claim. Automating and connecting spend management removes such temptations from the process.

 

All in all, there’s a very strong business case for smaller businesses to consider a more automated and joined-up approach to spend management.

 

For more detail, download the full report: Connecting the dots on travel, expense and invoice spend.