Effective expense management is vital for businesses to stay within budget and achieve cost savings. Forward-thinking businesses are adopting expense automation platforms like Zaggle XPNS to streamline expense filing and reimbursement processes gain real-time control and tracking of spending and maximize their savings potential.
In today’s economic climate, characterized by a high degree of uncertainty, most growing businesses appreciate the importance of financial discipline, treating it as an integral part of their DNA alongside innovation and revenue generation. Investors are further catalysing the trend by investing in start-up teams that precisely manage their business and cost structures while operating with urgency.
Employee expenses are a necessary cost component of any business but are often overlooked until it's too late. To ensure budget adherence and maintain financial control, effective administration is crucial. Forward-looking businesses are moving away from manual processes that consume valuable management resources, are prone to human errors, and miss cost-saving opportunities. Instead, these businesses are leveraging do-it-yourself platforms like Zaggle XPNS that enable businesses to digitise and develop intelligent automation capabilities early on. By utilizing modern expense management systems, businesses can establish scalable, agile, and robust processes that lead to improved financial outcomes.
Optimizing Efficiency and Streamlining Costs
According to the Forrester report, “Design Finance Automation To Drive Operational Efficiency and Profitability” -- finance automation is expected to become increasingly more important in driving growth for the business, and investments in finance operations and finance automation will increase in the next 12 months. Progressive businesses, focused on evolving their finance function, are taking proactive measures to improve efficiency and reduce overall operating expenses. This includes:
Driving spend control downward
Given the decentralized nature of employee expenses, businesses must strike a balance between empowerment and control. Cost controls cannot be solely managed at a central level. Businesses should actively involve employees in driving budgetary compliance and strengthening the company's finances. A practical approach is to provide employees with pre-loaded cards tied to specific spending limits, granting them autonomy while maintaining control over overall expenses.
Additionally, businesses can streamline the approval and reimbursement process for low-value expenses. Automation can be leveraged to configure approval and reimbursement processes based on factors such as expense value, employee grades, and transaction frequency. For example, the system can be programmed to automatically approve and reimburse expenses at or below USD 5, up to a maximum of three times a month per employee, without the need for manual intervention or review.
Standardizing policies and processes
Standardized expense policies are fundamental in establishing a decentralized spend model and implementing proactive cost controls. For businesses and employees, the policies serve as a blueprint by defining acceptable and non-acceptable expenses and setting thresholds facilitating easier money management. Modern spend management tools can integrate these policies into a mobile app, providing employees convenient access to spending guidelines while using their company cards. This reduces the chances of non-compliant spending and fostering a culture of responsible financial behaviour within the organization.
Making clear decisions
Active expense management requires being constantly attentive and watchful, which can be difficult for growing organizations with limited management bandwidth and lean financial teams. Expense management platforms like Zaggle XPNS provide robust live dashboards and 100% clarity visibility into spending, enabling businesses to optimize budget utilization by identifying areas where expenses can be reduced.
Categorizing transactions allows management teams to view big-picture trends, speedily drill down into how funds are being spent, track budget adherence and make data-driven decisions to achieve better financial outcomes.
Improving budgeting accuracy
Accurate forecasting is crucial for businesses to maintain cost control. By closely monitoring and analysing spending patterns, and trends, businesses gain insights that facilitate better forecasting of future expenses and enable precise resource allocation aligned to overall cost management objectives of the organization.
Plugging spend leakages
Approximately 5% of receipts are incorrectly filed by employees. Businesses can easily identify errors, incorrect/duplicate spending, and potential waste. This includes identifying claims against customer dinners on holidays or duplicate fuel receipts. Additionally, businesses can identify and address unused subscriptions or excessive travel expenses.
Unlocking time savings for higher productivity
The existing processes, where employees manually enter expense receipts in Excel files, follow up on approvals, and wait for managers to verify receipts, consume valuable productive time. Finance personnel also spend a significant amount of time reconciling expenses. Implementing digital-first processes and workflows can alleviate administrative burdens, resulting in improved employee satisfaction, productivity, and retention.
Invest in SaaS-based DIY Platforms
Growing businesses have distinct business and operational priorities. While they recognize the advantages of automating expense management, they may be cautious about investing in complex systems that come with lengthy implementation timelines and high costs.
To cater to the specific needs and priorities of growing businesses, Zaggle has introduced XPNS, a self-service platform designed to digitize expenses in under 30 minutes. The platform provides a comprehensive set of controls to effectively manage expenses, and real-time tracking of spend to make informed decisions to control costs more effectively.
One significant advantage of XPNS being a SaaS-based solution is the cost benefits it offers. Instead of investing in developing and maintaining an in-house expense management system, which can be expensive and resource-intensive, businesses can leverage the platform on a pay-as-you-go basis.
