SAP Concur White Paper | EXTERNAL5 Ways to Improve Control Over Spend

Top 5 Ways to Improve Control Over Spend

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Table of Contents

3 Strategies to Tame Employee Expenses and Supplier Invoices

4 1. Capture Spend as Early as Possible

5 2. Reduce Errors and Duplication

6 3. Detect and Stop Fraud

7 4. Comply with Government and HMRC Regulations

8 5. Use Spend Data to Drive Better Decision-making

9 Modern Finance Leaders Power Agile Businesses

© 2018 SAP SE or an SAP affiliate company. All rights reserved.

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When you’re in the driving seat of the business,you need to have a complete handle overcompany-wide spend. Only then can you bettermanage cash flow and make smarter spendingdecisions. But, you can only manage whatyou can see.

Transparency into employee spend lets yourespond to changing market conditions withagility, scaling business operations up and downaccordingly – but it’s not always that easy to get.So, how can you ensure you’re equipping youremployees with the tools they need to do theirjobs, while getting the visibility you need topropel the business forward?

THERE’S NEVER BEEN A BETTER TIMEThe current economic and political uncertaintyfacing the UK is proving an added challenge forfinance leaders. Business survival rates amongsmall- to medium-sized businesses (SMBs)

continue to fall with 38% believing they will beout of business in the next five years if they don’tadapt to digital technologies.1 The temptationfor many businesses may be to sit back and seehow a post-Brexit economy shapes up. But doingnothing is the most risky strategy of them all.The ability to adapt quickly to fluid marketconditions could be the difference betweentriumph and failure. As a finance leader, yourbusiness relies on you to provide strategicinsight into spend and help shape the decisionsthat will ensure survival tomorrow. And howyour business manages key business spendlike employee expenses and supplier invoicesis an important piece of that puzzle.

There’s never been a better time to take controland prepare for whatever the market can throwat you. And to help you along the way, this guidesets out 5 ways you can gain better visibility ofyour total employee spend.

Strategies to Tame Employee Expenses and Supplier Invoices

38% of SMBs believe they will go out of business if they don’t adapt to new technologies.

- Exact Cloud Barometer Report

1. Exact Cloud Barometer Report, 2016 © 2018 SAP SE or an SAP affiliate company. All rights reserved.

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A fundamental problem with manual, paper- based processes is that visibility of spend comestoo late to inform intelligent decision making.Employee spend – be it through expenses orsupplier invoices – needs to be visible as early as possible to give you meaningful insight.

A MANUAL MAELSTROMThe finance processes we see in manybusinesses today consist of a combination of paper receipts or forms and spreadsheets. Yet, what starts out as a manageable process can quickly become an administrative headache as your company grows, leaving you with little visibility into your outgoing spend until it’s too late.

We often hear of employees holding onto theirexpenses for as long as possible beforesubmitting a claim because the process is sopainful. This increases the risk of them losingtheir receipts. Your team only get a view of thatspend weeks or months after it’s occurred –making accurate accruals an impossibility.

At the same time, manual processes are stoppingyou getting early visibility into your invoice

spend too. A single supplier invoice can touchan average of 15 people on its journey acrossthe business.2 And when invoices are receivedby multiple people on paper and by email, itslows down the review and approval process.

Automating finance processes like expenses andinvoices delivers far greater levels of visibilitybecause that spend is captured much earlier inthe process. By enabling employees to take aphoto and automatically import their expenseson a mobile app, they could be submitting theirclaims during a business trip – not weeks after.And, even if they don’t submit the claim straightaway, you can see what they have spent so farand anticipate future claims. This gives youinstant and accurate insight into what’s beingspent in real time.

For invoices, having a centralised place wheresuppliers can submit their invoices as a first portof call gives you a clearer picture of upcomingspend before invoices are dispersed across thebusiness for approval. A Purchase Order (PO)process can further help increase visibility byallowing you to project spend before it’s evenbeen committed.

39% of employees say they deliberately ‘stack’ expense claims to submit in one go.- Concur® Expenses’ Benchmark Report

1. Capture Spend as Early as Possible

2. Concur Supplier Invoice Benchmark Report: https://www.concur.co.uk/resources/supplier-invoice-benchmark-report © 2018 SAP SE or an SAP affiliate company. All rights reserved.

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Whenever people are involved, mistakes canhappen. If you’re reliant on paper to manage vitalfinance processes, the door opens to errors. Lookfor steps in the process where you can removethe risk of human error, such as data rekeying.

FINANCE SPEND A DAY A WEEK ON ADMINResearch by SAP® Concur® and Vanson Bournerecently found that many finance teams in the UK are spending upwards of a whole day a week just on admin tasks like data capture.3 When your team spend time ‘copy and pasting’ details from paper receipts and invoices into spreadsheets and tools, the risk of errors significantly rises.

Technology like Optical Character Recognition(OCR) can save you time and prevent mistakesby automatically reading data and inputting itwith a high degree of accuracy into financesystems. For example, it can help travellers byautomatically scanning all the details on theirpaper receipts and instantly prepopulating anexpense claim for them together with a digitalcopy of the receipt. The same technology isstreamlining invoice data capture, giving your

team time back for more value-added tasks likechecking against company policies and reviewingsupplier invoices for inaccuracies.

ELIMINATE DUPLICATE PAYMENTSEver get the sneaking suspicion a receipt orinvoice has already been paid? With the amountof documentation the average finance teammanages, it’s no surprise. By relying on paper,spreadsheets and memory, it’s very easy forduplicate expenses and invoices to slip in. Thinkof all the copies of a single invoice that could befloating around the business in mailboxes or onpaper and you can see just how easy it is to paytwice. In fact, a third of UK finance leaders admitto having paid a duplicate invoice (that they’reaware of).4

An automated system can stop duplicatepayments in their tracks by cross-checkingevery receipt or invoice and instantly flaggingwhen the same copy is received. Managerscan reject claims before they even get to thefinance department, saving you time – andof course, pennies.

OCR technology can reduce manual data entry by 50-75%

2. Reduce Errors and Duplication

41% of finance leaders have received a duplicate invoice and 33% have actually paid one.

- Vanson Bourne

3 & 4 The Finance Leader Report, 2016: https://www.concur.co.uk/sites/default/files/uk/the_finance_leader_report.pdf © 2018 SAP SE or an SAP affiliate company. All rights reserved.

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The lack of checks and balances in many manualfinance processes makes them a natural targetfor fraud from both internal and external sources.How might your processes be exploited and areyou at risk?

EXAGGERATED EXPENSE CLAIMSIn recent years, high-profile cases of exaggeratedexpense claims have highlighted how big theissue really is, and MPs and their expensescontinue to create headlines.

In many cases employees feel like anexaggerated or fictitious expense claim is theirway of boosting their salary, getting back timeowed for working out of hours, or having tosubmit their claims in their own time. This isoften hidden under mileage as it’s perceived tobe the easiest area to fiddle. While in many casesemployees don’t mean to break the rules butconfusion around travel and expense policiescan lead to overinflated claims.

FRAUDULENT INVOICESWhen it comes to invoices, fraud can be rife too –in fact, scammers are finding more sophisticatedways to get you to pay up. HMRC and Action

Fraud warn of fake invoices for things likedirectory listings and patents which appearlegitimate but don’t even exist.5 Invoices mightstate that the due date for payment has passedor threaten that non-payment will affect yourcredit when you might not even have ordered the goods or services. Can your spreadsheet pick these threats up?

Gaps in expense and invoice processes alongwith a lack of adequate detection capabilities are the main areas of fraud weakness for manybusinesses. Moving to more intelligent onlinetools can help you spot and stop unscrupulousbehaviour. For instance, a built-in mileage trackercan help employees with their travel expensesand clearly show up journeys where mileagelooks higher than expected. An automatedinvoice system can flag vendors who aren’trecognised or invoices that don’t match up to purchase requests, giving you increased visibility and protection against fraud.

The key is to create more transparent processes,connecting the dots across the business andputting early-warning systems in place.

3. Detect and Stop Fraud

20% of full-time employees believe it’s acceptable to exaggerate their expenses from time-to-time.

- YouGov

5. Action Fraud: http://www.actionfraud.police.uk/node/197 © 2018 SAP SE or an SAP affiliate company. All rights reserved.

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Compliance can be a big worry for manybusinesses with 43% of senior finance leadersexpressing concern over HMRC inspections.When the taxman pays a visit, how can youensure you’re compliant and that it doesn’t costyou time and money?

SECRETS TO SATISFYING THE TAX INSPECTORA visit from HMRC can be scary – no matter whatsize your business. So, what are they looking for?When the taxman visits they’ll be inspecting allyour spend processes from start to finish. Thatincludes employee expenses, invoice purchases,payroll and more. The secret to satisfying them ishaving a fully traceable and accurate audit trailunderpinned by robust policies. They’ll want tosee that spend is within those policies andsupported by the right documentation. Forinstance, every purchase should have theappropriate VAT details and manager approvals.And when reclaiming VAT, you’ll need to knowwhat you can claim for and at what percentage.

When you automate your end-to-end spendprocess, digital copies of your receipts or invoices

can be found in one place – and they’re easy tosearch and cross-reference at any time. A clearapproval chain with tracked workflow andcomments shows the complete audit trail forevery purchase. And with spending policies andlegislations built in, employees, managers andyour team always know what’s out of policy.

NEW PAYMENT LEGISLATIONRegulations are being updated all the time,making it a constant challenge to keep abreast.For instance, from April 2017 new legislationrequires large companies to report their paymentpractices twice a year – including the averagetime it takes to pay supplier invoices.6 As HMRCinvests increasingly more time and resourcetracking company compliance, how are yousetting up your systems and processes so thatyou’re beyond reproach?

The key to compliance lies in your processes. Getthese right and you’ll have the ability to report allof your spending activity, ensuring your businesscomplies with government regulations.

4. Comply with Government and HMRC Regulations

13% of finance leaders don’t reclaim VAT on expenses.

- Concur Expenses Benchmark Report

6. Department for Business, Energy and Industry Strategy, 2017: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/587465/payment-practices-performance-reporting-requirements.pdf

© 2018 SAP SE or an SAP affiliate company. All rights reserved.

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Putting in place automated processessignificantly increases spending visibilityacross your business. Take it a step furtherby aggregating data from multiple sourcesto get the full picture. Then you’ll be able toanalyse meaningful data, spot trends andtake decisive action.

With manual processes, valuable decisionmakingdata is locked in silos on spreadsheetsand even on loose paper. Making sense of it, letalone analysing it, and spotting trends, isincredibly time-consuming and tricky. Being ableto integrate spend reporting from across thebusiness and view this data visually drivesincredibly powerful insight.

VISUAL REPRESENTATION OF DATABy enabling data to feed from multiple sourcesinto a single, visual platform, you start to seeclear patterns begin to emerge.

Consider an annual sales kick-off event. Can yousee all associated spend to give you a totalbreakdown of what the event cost? The flights,ground transportation, hotels, venue hire,

refreshments and incidentals could come outyour budget in a number of ways – through yourtravel department, on invoices, throughcorporate cards and through employee expenses.Can you easily tie all this spend together todayto justify whether the event was worth theinvestment? And can you see which departmentsor individuals were the highest spenders orspent out of policy? Can you determine whetherthe event stuck to budget? And, how much youmight have to invest for next year?

This overall spend data is invaluable to thefinance team and seeing it visually transformstraditional analysis. You can quickly identifyareas to cut costs, suppliers with whom youcould negotiate discounts and areas where you should be investing based on strong ROI. You can guide employees to make better buying decisions and easily spot where the biggest spend risk areas lie. As businesses increasingly rely on their finance teams to provide strategic insight that shapes decision-making, access to this type of data is becoming the expected benchmark.

5. Use Spend Data to Drive Better Decision-making

© 2018 SAP SE or an SAP affiliate company. All rights reserved.

Amidst increased economic uncertainty, finance leaders are playing an ever important role in‘steering the ship’, helping the business to make the right decisions that guarantee their survivaltomorrow. Equipping the business with insight that enables it to respond to changing marketconditions with agility and speed is now a critical function of the finance team. It’s not enoughanymore to keep the business ticking over with old processes. Not only are they stealing yourteam’s valuable time, they don’t provide you with the crucial visibility you need to adequatelymaintain control over business spend.

By looking into the areas where you can improve visibility and take back control, you’ll be helpingto play a crucial part in future-proofing your business and ensuring its existence tomorrow.And what greater role can a finance leader have?

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If you’d like to speak to us about how you can improve visibility and control in your business or how SAP Concur can help, call us on 01628 648 100 or visit our website.

Modern Finance Leaders Power Agile Businesses

© 2018 SAP SE or an SAP affiliate company. All rights reserved.

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Take a Test Drive

Other Resources

The Blueprint of a Best Practice Expense Process

A 10-step Guide to an Efficient Supplier Invoice

The Finance Leader Report

ABOUT SAP CONCUR SAP Concur imagines the way the world should work, offering cloud-based services that make it simple to manage travel and expenses. By connecting data, applications and people, SAP Concur delivers an effortless experience and total transparency into spending wherever and whenever it happens. SAP Concur services adapt to individual employee preferences and scale to meet the needs of companies from small to large, so they can focus on what matters most.

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