A new report from expense reporting software provider Certify found that 50 percent of companies surveyed are still using a manual expense reporting system â the highest percentage in the annual survey's history.
Among small businesses, that percentage is even higher â 70 percent â while only 26 percent of enterprise companies use a manual method, defined as any process that uses Excel, pen and paper, or âhomegrown systems.â
More than 500 CFOs, controllers, and noncustomer finance professionals were surveyed by Certify for its 2016 Expense Management Trends Report.
âWith companies now spending between 10 percent to 12 percent of total annual revenue on travel and entertainment, the systems used to manage [those] expenses have become increasingly important to the bottom line,â the report states.
That could be why web-based systems beckon, with 53 percent of enterprise companies, 46 percent of midsized businesses, and 37 percent of small businesses making the switch. The majority (62 percent) said they'll make the switch within the next 12 months.
Why? Respondents cited increased simplicity (38 percent), accessibility of the expense system (20 percent), a gain in reporting and analytics around travel and entertainment spend (20 percent), improved employee compliance rate (13 percent), and faster employee reimbursement (11 percent).
For example, 88 percent of companies using a web-based system said they turn around expense reimbursements in 12 days or less. And slightly more than half (53 percent) can automatically review and flag out-of-policy expenses, 44 percent cut back or eliminated Excel spreadsheets, and 42 percent spent less time creating and approving expense reports.
Switching to a web-based system also enhanced the following accounting and finance-related functions:
Annual budgeting and planning (44 percent)
Auditing (43 percent)
Invoicing and payments (39 percent)
Regular forecasting (28 percent)
Financial reporting (25 percent)
Procurement/vendor negotiations (18 percent)
Identifying fraud (14 percent)
Making the switch also is a boon to companies' returns on investment (ROI), according to the report. Nearly three-fourths (74 percent) of companies get a full ROI in a year or less. That breaks down to 66 percent of enterprise companies, 74 percent of midsized, and 87 percent of small businesses.
In two years or less, 92 percent of companies realized full ROI: 91 percent of enterprise, 93 percent of midsized, and 87 percent of small businesses.
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.