Manual data entry and lack of analytics are the biggest challenges faced by CFOs: Report
New Delhi, Oct 17 (KNN) In today’s digital era where automation has become a necessity, most organizations function on an old and archaic system of expense filing, according to a recent study report unveiled by Happay, the leader in Business Spend Management and one of the fastest growing fintech companies in India.
The study titled ‘State of Indian Enterprise Travel & Expense Management 2018’ which was undertaken to understand the current state of Travel and Entertainment (T&E) expense management across companies in India and the degree of automation in it, revealed that 21% CFOs (Chief Financial Officers) cited manual data entry of expenses and attaching of receipts as their biggest challenge.
Another factor that makes the work of a CFO more difficult & time-consuming is lack of travel spend analytics around T&E expenses. This increases the workload of a Finance department furthermore.
The Happay, the leader in Business Spend Management and one of the fastest growing FinTech companies in India, unveiled a CFO Benchmark report titled ‘State of Indian Enterprise Travel & Expense Management 2018’
Three-fourth of respondents in the study said, expense claims still had to be filed manually by attaching bills to paper vouchers. Quite surprisingly, despite the huge penetration of mobile devices and desktops just 12% and 27% of companies allow employees to use these devices for recording travel claims.
The report also highlights that 82% of companies are either partially or entirely lacking in making the whole T&E process automated despite it being the second-largest operational expense after payroll.
About 50 % of the CFOs have understood this urgent need and taken digitization upon them, to switch to an automated expense management system in the next 6 months.
Besides, the study found that expense fraud is one of the most overlooked types of fraud and entails a staggering cost for companies.
Despite this, 48% of companies do not have a system to detect frauds as T&E expenses are mapped manually.
According to Happay’s report, nearly 55 % of the companies stated their inability to retrieve past expense data as a key bottleneck in auditing and managing T&E expenses.
According to Varun Rathi, Co-Founder & COO, Happay, “Some of the insights which came through this benchmark report are startling. Most CFOs are tired of half-baked automation, which is impacting the company’s bottom line. CFOs are now more focused upon the outcomes of their digital journey and getting the necessary technology integrations done, to make the automation process smoother.”
He further added “In our experience, CFOs are the real change agents or visionaries. Despite the resistance from internal teams, they are taking hard decisions to get real-time visibility into T&E spending by moving into an era of system-driven policy compliance in order to stop fraudulent claims.”
Another startling fact that report raised is that 33% of the companies do not have GST compliant T&E solution and are unable to use any digital means to perform the calculations.
Even though 67% of the companies have some GST compliant software, they still need the employees to submit tour bills and enter vouchers manually to claim input credit, it added.
The bigger issue is that wherever the company is using software to manage T&E it is assumed to be integrated with other systems, however, in reality, the data entry into the accounting system or ERP is being done manually by 59% of organizations, study report pointed.
“There are enough data points to prove that fully automated T&E has resulted into paperwork reduction by 96% and plugging leakages by 90%. Digital CFOs are more confident and are showing the urgency to adopt the new age, mobile-based solutions”, added Rathi.
According to report, more than 65% of companies record employee expenses manually. Nearly 54% of companies are unable to provide their employees visibility about the approval status. Hence, employees and back-office teams keep spending a significant amount of time and effort in follow-up & claiming reimbursements.