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Employee expenses can account for as much as one in five rand a company spends. Yet, speeding up reimbursement can improve company costs, writes MARINUS VAN SANDWYK.

In most corporations, employee expense reimbursements are mired in manual paper-based procedures. This results in lengthy and costly process cycles, substantial duplication and prohibiting meaningful spend analysis. Capturing expenses electronically as they are incurred can dramatically reduce costs, increase accuracy and improve efficiencies where it has an impact on the business’s bottom line.

Electronic capturing and processing of expenses lets companies quickly and consistently collect expense information, enforce company policies and contracts and gain insight into the traditionally “maverick”” travel and entertainment arena, states a recent report by analyst research and analysis specialist Aberdeen Group. That is why these applications can be strategic tools in total cost management efforts across the organisation.

Aberdeen’s report demonstrates that in nine cases out of ten, automating a previously manual, paper-based process led to savings for companies of all sizes.

Most critical is the fact that although paper-based processes work, they are not the best solution and many companies consider travel expenses to be a necessary and unavoidable cost and do not realise there is benefit in tracking and analysing these expenses.

But bringing this to light today is the global economic slowdown. Tough economic times are forcing companies to spend their IT budget on projects that deliver a direct saving to the business.

According to Aberdeen, the main benefits that companies enjoy are dramatically reduced processing time, along with cost savings. Although many financial directors are loath to accept that automating expense reports can save money, earlier research by Aberdeen showed that the average time it took an employee to complete an expense form was more than 30 minutes: after automation it was reduced to about 18 minutes.

It was taking accounts departments 22 minutes on average to review manual expense reports, which included hand-checking the maths. With an automated solution, that time dropped to just five minutes. That translates directly into cost savings.

The beauty with these applications is that one size does fit all. No matter the industry, the expense claim and reimbursement process is exactly the same.

The only potential stumbling block customers face is in the implementation and uptake of the application. In order to overcome this they need to communicate. This type of application affects almost every department in the business, because they all have the potential to generate some form of expense. Aberdeen’s report says: “”You have to work with the different constituent groups and help them understand how the process is going to change, how it is going to affect them, how to use the tools””.

Doing this means that adoption will be swift and return on investment almost immediate.

Automating expense reporting does not require massive change management. While employees take a couple of weeks at most to adjust to the new system, they will quickly realise that they are reimbursed faster and will never look back.

* Marinus van Sandwyk is chairman of PocketAccountant, a world-first PDA-based application that automates expense and income tracking and prepares and distributes the resultant data in a tax-ready format. For more information, contact Madeleen Bester of PocketAccountant on 083 604-0869 or by e-mail at madeleen@pocketaccountant.net

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