A new normal calls for a new world of expense management
By Andy Watson, SVP and GM, Asia Pacific Japan and Greater China, SAP Concur
With the unprecedented number of people working from home, 2020 has turned out to be a watershed year for companies to manage employee productivity.
While we marvel at the maturity of cloud services and digital technologies that have enabled this massive migration of work from office to home, many business processes and policies remain old world and manual, especially administrative and finance ones.
The bane of office workers’ lives, these administrative and finance processes, mainly expense claims, are mandatory but take up plenty of time better used to deliver meaningful work. This inflicts significant costs on businesses and the economy and causes employee frustration.
The vexation that Asia Pacific employees are reportedly feeling stems from the fact that most expense claims systems are not supportive of their usual practices in their daily lives, such as making cashless transactions with mobile wallets and super apps (umbrella apps containing other apps).
As an executive who clears a fair bit of my work on mobile, I can also understand why, with the rise of mobile and digital lifestyles, information workers young and old are expecting their employers’ business processes to become more consumerised.
The SAP Concur brand commissioned a study in May 2020, Finance in the New World of Work, conducted by Asia Insight, that found many employees across Asia Pacific expect their firms to cut the unproductive time they spend on managing expenses and better support the digital work and lifestyles they are accustomed to today.
Finance transformation lags in Asia Pacific
The study shows that while many organisations have embarked on digital transformation over the last few years, many firms still handle expense claims manually.
This is perhaps unsurprising given that digital transformation has tended to focus on high-profile projects. Prosaic functions like expense management would easily have been overlooked.
A significant 38% of respondents say they submit expenses manually by filling out a form and enclosing physical receipts. Such a manual process is tedious, error prone, and ill-suited to the modern digital workplace.
Half of the respondents use a semi-automated tool, where they key in the expense claim items digitally but enclose physical or scanned receipts. Only 12% of respondents have a fully-automated, intelligent expense claim tool.
Employees and managers spend a substantial amount of time submitting and reviewing/approving claims, impacting business productivity. Employees spend an average of 4.5 hours per month filing expense claims, or half a typical workday. Managers have it worse – they spend 6.1 hours reviewing and approving expense claims, plus another 4.5 hours submitting their own claims.
This time really adds up. The study leaders used International Labour Organization (ILO) data and the study’s results to calculate that saving just 10% of the time spent on filing and approving claims would translate to US$21.5 billion* of potential GDP revenue gain for Asia Pacific each year, assuming all the lost hours are diverted to productive work. Mid- to large-sized organisations could save tens or hundreds of thousands of dollars** over the same period.
Beyond the tedium and inefficiencies, the study also found that current expense management systems’ support for modern payment methods is inadequate. Close to a third (29%) of respondents say they want their expense management software to be able to integrate with external apps to enable added functionality like reimbursement of payments made through super apps.
There is also clear potential for mobile wallets to become a more dominant payment mode for business purchases, given that mobile wallets were found to be a significantly more preferred payment mode for personal purchases, vis-Ã -vis company purchases.
Finance and administrative processes are tied to employee satisfaction
Good employees are hard to come by, and firms should do their best to retain them. Almost two-thirds (65%) of the respondents made a very strong or somewhat strong link between their overall experience of finance and administrative processes to their overall satisfaction of working for their organisation.
Close to half (49%) of office workers are less than satisfied with their firm’s current expense claims process. A similar percentage (43%) feel the same about their expense management software:
- Employees want to be able to speed up the entire expense claim process; fill up expense line items progressively over the month and have them consolidated automatically into an expense report; and submit expenses anytime and anywhere via mobile apps, in that order of priority.
- Managers want to be able to spend less time reviewing and approving expense claims; detect expense and receipt data for fraud, mistakes and policy violations before reimbursements; and review and approve expenses via laptops and PCs, in that order of priority.
Asia Pacific expense management must become more automated and digital
As the world starts to normalise, businesses will change their focus – from crisis, to recovery, to growth and resiliency. In the coming months, organisations will re-think and in many cases, re-invent, the way they run.
Efficiency, agility, and the ability to innovate are going to be more important than ever and automation will be central to helping organisations achieve these three qualities.
Automation takes repetitive, manual aspects out of routine finance and administrative tasks, saving employees time so they can focus on meaningful work. It also saves time for the finance team by eliminating paperwork and detecting erroneous or fraudulent claims.
As a former CFO, I am thrilled at how much more effective automation is at providing visibility and control and driving compliance. Manual reporting processes are inherently opaque − the lack of integration between systems makes it impossible to track spending effectively, to manage regulatory compliance, or to enforce basic policies.
Modern automated solutions also come with digital and mobile functionalities, and broader integration with the world’s payment platforms, to boost employee experience and satisfaction.
All in all, automation will be vital to building a finance organisation that can truly support the business in delivering value to customers, enabling it to become more resilient for the new era.
Explore:
Find out more about Finance in the New World of Work, the SAP Concur-commissioned Asia Pacific study.
*To calculate the savings to be reaped from automating manual expense claim processes, Asia Insight created an economic loss model based on macro-economic data compiled by the International Labour Organization (ILO).
This model divides the GDP of each market by its total number of workers to derive the average output per worker. The model then assumes a 10% reduction in wasted expense submission, review and approval times, and multiplies it by the number of information workers in each market to get the economic gain per market. These market gains are then aggregated to project the overall Asia Pacific gain of US$21.5 billion.
**Similarly, gains can be projected for individual businesses. ILO statistics show that the average output of one hour of a worker’s time in Asia Pacific is US$7.70. If a business currently incurs 10,000 man-hours per month on expense claims and could save 10% of that time, it would have conserved 1,000 man-hours per month, translating to a benefit of US$7.70 x 1,000, or US$7,700 per month, or US$92,400 per year.
With the unprecedented number of people working from home, 2020 has turned out to be a watershed year for companies to manage employee productivity.
While we marvel at the maturity of cloud services and digital technologies that have enabled this massive migration of work from office to home, many business processes and policies remain old world and manual, especially administrative and finance ones.
The bane of office workers’ lives, these administrative and finance processes, mainly expense claims, are mandatory but take up plenty of time better used to deliver meaningful work. This inflicts significant costs on businesses and the economy and causes employee frustration.
The vexation that Asia Pacific employees are reportedly feeling stems from the fact that most expense claims systems are not supportive of their usual practices in their daily lives, such as making cashless transactions with mobile wallets and super apps (umbrella apps containing other apps).
As an executive who clears a fair bit of my work on mobile, I can also understand why, with the rise of mobile and digital lifestyles, information workers young and old are expecting their employers’ business processes to become more consumerised.
The SAP Concur brand commissioned a study in May 2020, Finance in the New World of Work, conducted by Asia Insight, that found many employees across Asia Pacific expect their firms to cut the unproductive time they spend on managing expenses and better support the digital work and lifestyles they are accustomed to today.
Finance transformation lags in Asia Pacific
 |
| Source: SAP Concur website. Ecosystem illustration for the Finance in the New World of Work study. |
The study shows that while many organisations have embarked on digital transformation over the last few years, many firms still handle expense claims manually.
This is perhaps unsurprising given that digital transformation has tended to focus on high-profile projects. Prosaic functions like expense management would easily have been overlooked.
A significant 38% of respondents say they submit expenses manually by filling out a form and enclosing physical receipts. Such a manual process is tedious, error prone, and ill-suited to the modern digital workplace.
Half of the respondents use a semi-automated tool, where they key in the expense claim items digitally but enclose physical or scanned receipts. Only 12% of respondents have a fully-automated, intelligent expense claim tool.
Employees and managers spend a substantial amount of time submitting and reviewing/approving claims, impacting business productivity. Employees spend an average of 4.5 hours per month filing expense claims, or half a typical workday. Managers have it worse – they spend 6.1 hours reviewing and approving expense claims, plus another 4.5 hours submitting their own claims.
This time really adds up. The study leaders used International Labour Organization (ILO) data and the study’s results to calculate that saving just 10% of the time spent on filing and approving claims would translate to US$21.5 billion* of potential GDP revenue gain for Asia Pacific each year, assuming all the lost hours are diverted to productive work. Mid- to large-sized organisations could save tens or hundreds of thousands of dollars** over the same period.
Beyond the tedium and inefficiencies, the study also found that current expense management systems’ support for modern payment methods is inadequate. Close to a third (29%) of respondents say they want their expense management software to be able to integrate with external apps to enable added functionality like reimbursement of payments made through super apps.
There is also clear potential for mobile wallets to become a more dominant payment mode for business purchases, given that mobile wallets were found to be a significantly more preferred payment mode for personal purchases, vis-Ã -vis company purchases.
Finance and administrative processes are tied to employee satisfaction
Good employees are hard to come by, and firms should do their best to retain them. Almost two-thirds (65%) of the respondents made a very strong or somewhat strong link between their overall experience of finance and administrative processes to their overall satisfaction of working for their organisation.
Close to half (49%) of office workers are less than satisfied with their firm’s current expense claims process. A similar percentage (43%) feel the same about their expense management software:
- Employees want to be able to speed up the entire expense claim process; fill up expense line items progressively over the month and have them consolidated automatically into an expense report; and submit expenses anytime and anywhere via mobile apps, in that order of priority.
- Managers want to be able to spend less time reviewing and approving expense claims; detect expense and receipt data for fraud, mistakes and policy violations before reimbursements; and review and approve expenses via laptops and PCs, in that order of priority.
Asia Pacific expense management must become more automated and digital
As the world starts to normalise, businesses will change their focus – from crisis, to recovery, to growth and resiliency. In the coming months, organisations will re-think and in many cases, re-invent, the way they run.
Efficiency, agility, and the ability to innovate are going to be more important than ever and automation will be central to helping organisations achieve these three qualities.
Automation takes repetitive, manual aspects out of routine finance and administrative tasks, saving employees time so they can focus on meaningful work. It also saves time for the finance team by eliminating paperwork and detecting erroneous or fraudulent claims.
As a former CFO, I am thrilled at how much more effective automation is at providing visibility and control and driving compliance. Manual reporting processes are inherently opaque − the lack of integration between systems makes it impossible to track spending effectively, to manage regulatory compliance, or to enforce basic policies.
Modern automated solutions also come with digital and mobile functionalities, and broader integration with the world’s payment platforms, to boost employee experience and satisfaction.
All in all, automation will be vital to building a finance organisation that can truly support the business in delivering value to customers, enabling it to become more resilient for the new era.
Explore:
Find out more about Finance in the New World of Work, the SAP Concur-commissioned Asia Pacific study.
*To calculate the savings to be reaped from automating manual expense claim processes, Asia Insight created an economic loss model based on macro-economic data compiled by the International Labour Organization (ILO).
This model divides the GDP of each market by its total number of workers to derive the average output per worker. The model then assumes a 10% reduction in wasted expense submission, review and approval times, and multiplies it by the number of information workers in each market to get the economic gain per market. These market gains are then aggregated to project the overall Asia Pacific gain of US$21.5 billion.
**Similarly, gains can be projected for individual businesses. ILO statistics show that the average output of one hour of a worker’s time in Asia Pacific is US$7.70. If a business currently incurs 10,000 man-hours per month on expense claims and could save 10% of that time, it would have conserved 1,000 man-hours per month, translating to a benefit of US$7.70 x 1,000, or US$7,700 per month, or US$92,400 per year.
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