Some of the biggest challenges for a growing business can come from the least expected areas. It’s from seemingly trivial work processes that start to fail as the demands of a dynamic business increase.
It creates a dangerous situation in which a company’s infrastructure is not able to handle its ambitions. It’s one of the reasons why just 40 per cent of new UK start-ups will survive past the first five years.
There’s no better example of the way that failing processes can stifle a company’s growth than with expense management. Finding the best ways to manage and monitor employee expenses is not usually top of the priority list for new companies.
When an organisation is small scale and has a simple structure, the requirements of an expense setup may seem minimal. It’s viewed as a fairly mundane finance task and, for this reason, many businesses will rely on traditional setups.
They will use a manual system with employees keeping paper receipts for any business costs they incur, with these being attached to a monthly claim form. The reliance on paperwork means information is manually moved through the system, details duplicated from paper forms and onto Excel spreadsheets.
Future-proof your flawed systems
It creates a slow and inefficient way of working as finance teams face a monthly wave of claims that need to be processed by hand. Any problems, however, may be barely perceptible in the early stages of a growing business.
It’s only when organisations increase in scale and administrative complexity that the inherent weaknesses are magnified and exposed. It’s when finance teams become so busy struggling with paperwork that they no longer have time to properly monitor or police claims.
This failure of traditional setups is what has made expenses such a toxic area of company finances. It’s estimated by the National Fraud Authority that £100m is lost each year by UK businesses to fraudulent expenses such as illegitimate and exaggerated claims.
There’s also the heightened risk of fines and prosecutions for failing to ensure that costs are legitimate and comply with all the complexities of HMRC tax regulations. The danger is that companies will only make changes once the damage has been done.
This is why it’s so important for any growing company to make sure it has an expense setup that’s future-proofed for the demands of today’s business environment. Digital and cloud-based management systems provide exactly that.
Future-proof your digital scalability
By allowing paper receipts to be converted into a digital form, the reliance on manual processes is removed. The move to automated processes and real-time information speeds up processing time by around 25 per cent.
With the repetitive processing and number crunching tasks being automated, it allows finance professionals to switch their focus to properly managing costs. It provides the tools they need to start effectively fighting workplace fraud.
It also provides an administrative structure which has the flexibility and scalability to grow with a company. A digital system can handle the employee expenses of a global company just as easily as a startup with a handful of employees.
So while expense management may not seem a high priority for a growing company, it’s one of those areas where it really does pay to future proof. Inadequate and overstretched expense systems are one growing pain that modern businesses no longer need to endure.
Webexpenses provides a smarter way to manage employee expenses. Learn more and request a free demo here.