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Expense automation: Why the real divergence is between digital and analogue companies

A report by Caxton FX finds that nearly two thirds of SMEs haven’t automated expense processes, while nine in 10 large companies have.

A report by FX and payments company, Caxton FX has found that almost a quarter (23%) of UK companies are still using “old fashioned” manual processes when it comes to expenses.

The report, Corporate Spending in 2019, found that for 50% of the one million companies still stuck in manual processes, the cost of upgrading to digital was seen as prohibitive. However, this was apparently leading to a trend whereby companies are no longer distinguished by size, but by whether they are digital or analogue.

“Respondents ranged from small businesses with £5m revenue to massive enterprises with more than 1000 employees.

“At the heart of the results, however, is a divergence not between big and small but between digital and analogue. Between those businesses who have made the leap to automated expense management and those who are still asking colleagues to staple receipts to an expense form,” the report said.

Jane-Emma Peerless, Chief Commercial Officer at Caxton, said that “given the fact that financial teams are always looking for ways to improve productivity and get more time back for their teams, it’s amazing” that there are still one million companies that haven’t digitised their expenses.

SMEs still lagging behind

While there were signs that the new divergence will be between digital and analogue companies, there was still plenty to suggest that SMEs had a lot of work to do to catch up with large corporations.

Just 38% of small companies (those with 50-99 employees) had digitised their expenses, while nearly 9 in 10 (89%) of large companies (over 1000 employees) had made the digital jump.

For those that had not yet automated, the reasons tended to revolve around time and money, something the report said was to be expected.

“This is no surprise given that the companies that have not yet made the switch tend to be smaller. They often lack the resources – both human and capital – to drive change within the organisation.”

Third of employees still asked to pay for expenses

More worryingly for Peerless was the fact that 35% of all employees still had to pay for expenses, before waiting to receive a refund from their employer. There were also damaging unintended consequences that arose from this policy.

“I know from personal experience, what a hassle that can be. I’ve seen on many occasions how the distrust that can be built between finance teams and the business development sales function, over the use of company expenses.

“I think on the employee side, they are essentially being asked to give an unauthorised loan to the company they work for. Because it can be anything between 15 and 60 days before they put the money back in their account,” she added.

Peerless added that employees as a result were being asked to shoulder the interest and the debt of the company unfairly.

“People now, in order to cover the costs, are having to take out their own personal credit cards in order to manage that process themselves. Which, if they do incur interest on those, they don’t get back from the company.

“I think it cuts right across the values that whatever that company is trying to portray in terms of the kind of company they are through this one action. They’re saying we don’t trust you and ‘we don’t think you know how to spend the money, because we’re not going to give you something to use from day one of the month’.”

Automate for control

Peerless said that companies should look to digitise their expenses if they wanted an enhanced level of oversight and control over a crucial element of their business.

“People come to us because they want to have control, they want to have oversight, they want to have some form of governance over expenditure.

“They want something which is desperately easy to use, that can be run on a day to day basis by an administrator with controls in place, that makes it much easier for everybody,” she concluded.


To find out more, read the report in full here

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