5 Trends that explain the popularity of cloud-based expense reporting
Every day more businesses realise the added value of cloud-based expense reporting. While cloud-based accounting has been popular for many years, expense reporting was for many organisations of secondary importance. That is changing rapidly. Cloud-based expense reporting tools – consisting of a mobile app to capture and submit business expenses and an online portal for more advanced features – are quickly becoming standard across all sectors of industry.
At SRXP, we identified five trends that explain the popularity of cloud-based expense reporting:
Cloud-based software has become the new standard
Firstly, finance departments have become more accustomed to cloud-based software. After switching to cloud-based finance software, it is easy to connect add-ons to improve other parts of the company’s financial process as well. Invoicing was one of the first add-ons adopted by many organisations, partly because it is a relatively cheap add-on, and it’s generally a quite straightforward process compared to expense reporting.
As the complexity of your business grows, you will need more features and a more flexible system to fit your requirements.
Travel spendings are rising
Allowing employees to travel for work has become common because businesses are operating in larger areas than before. In our globalising world, it has become easier to open offices in other towns and countries, making it necessary for employees to travel between offices. The Aberdeen Group reported in 2011 that on average 7 percent of the annual budget was spent on business travel expenses. Only two years later, they reported an increase of 3 percent: In 2013 companies, on average, spend 10 percent of the budget on travel expenses.
When the spending on business travel expenses increases, the need for efficient processing and control on expense reporting raises likewise.
Accountability and business transparency is high on the agenda
Expense scandals are all over the news. One the most infamous ones is the United Kingdom parliamentary expenses scandal. This is only one of the countless scandals that have roamed the newsrooms in the past decade. These scandals are still being published all around and have a colossal impact on corporate and political reputation. In The Netherlands, expense scandals of politicians and board members have been dominating the news year round.
Best-in-class expense reporting software offers features that allow expense policies to be enforced more diligently. By defining, for example, who is allowed to report what kind of expenses for what maximum amount. Claiming restricted expenses is impossible. Moreover, cloud-based expense reporting allows for easy approval, making it possible to check the expenses from every location at any time.
Demand to anticipate on upcoming expenses
While accounting and finance referred to more or less the same thing in the past, these are two different specialisations nowadays. Finance managers are increasingly focussed on the future and have to ensure a healthy financial situation for their business. That can be a real challenge if at the end of the month thousands or even tens of thousands of Euro’s of business expenses come in unexpectedly. Read here how SRXP has solved this problem for finance managers.
Real time insights and advanced reporting tools have become more important than ever to anticipate on unexpected reports.
Need for more efficiency
Finally, many businesses are under expanding pressure to increase profitability. One obvious way to realize those targets is by allowing employees to work more efficiently. Preventing employees from spending too much time on administrative overhead is a quick win. In the case of expense reporting, the benefits are both for the expense reporters and for the finance department. The Aberdeen Group has estimated that businesses can reduce their expense-processing costs by 60% to approximately $7 per expense report.
The organizational efficiency will rise as employees spend less time on administrative hassle. At the same time, cutting costs on administrative processes allows you to redirect resources to more valuable purposes.
Curious how cloud-based expense reporting contributes into increased transparency, efficiency and other company goals? Download the whitepaper on cloud-bases expense reporting below.
P.S. The popularity of cloud solutions is also fuelled by a larger trend, the trend of FinTech (financial technology). SRXP is nominated for the European FinTech Awards. Click here to cast your vote. Thanks in advance!