There are many ways companies can cut costs with the savvy use of payment cards and automation and more
SMEs in the UK in theory lose a combined £8.72bn every year due to time spent on managing financial expenses, at least according to a YouGov poll. That’s a lot of money.
Of course, like many polls of this nature, figures are aggregated from an often arbitrary set of factors to produce a stand out headline. Whether the figure is correct is not that important but the sentiment is right. Managing business expenses can be a headache, especially across large organisations and can impact everything from productivity through to profitability and even staff morale.
The poll says that employees of UK SMEs, who spend an average of just over 4 hours (4.10) every week managing a myriad of financial outgoings including invoicing, accounting, expenses, budgeting and forecasting. But surely that’s only half the issue. What about the impact on accounting departments and even financial planning and decision making?
Take a more holistic approach
As businesses move towards more cloud-based products and services there are opportunities to change the way in which this all works. APIs and plug-ins are becoming more ubiquitous, enabling access to a range of technologies and products such as Uber or receipt scanning apps, giving businesses an opportunity for a more holistic approach to expense management. For the first time in history we can start to apply a level of automation, speeding-up processing of payments, but also giving greater visibility of spending.
At the heart of this is the potential of digital or virtual cards. As well as the obvious security benefit of a digital card with a one-off payment restriction (the card can self-destruct to pre-determined rules), these cards enable easy payment tracking, improving management and analysis of payments. If they can integrate with known services such as taxis, hotels and restaurants, there is a potential for increased automation. This would limit the potential for theft and fraud and ensure a business has the ability to track payments in real time.
Automate, automate, automate
The idea of increased automation in accounting is not far-fetched. We are probably a long way from Dr Michael A. Osborne and Dr Carl Benedikt Frey’s predictions (accounts and auditors ranked high in the probability of automation chart) although certainly some of the more mundane tasks can be automated now. Automatic invoicing and payments, for example, are already achievable, so why not automatic expense management and compensation?
If we can find ways to free-up valuable time and help businesses improve productivity then it has to be a good thing. Banks too should see the benefit. If banks could make commercial cards the method of choice for expense payments by offering a broader range of options, such as digital cards, automated invoicing and online card management then surely it would unlock huge value in commercial cards? We have already seen ourselves how digital cards and increased management options can actually boost payments. Anything that helps customers spend less time on expense management and more time on doing their actual jobs has to be a win-win.