How to win CFO approval for expense management automation

Most CFOs want to boost profit margins—and reducing the cost of expense processing is one way of accomplishing this. The Global Business Travel Association found that it costs organisations $58 to process one expense report and an average of 20 minutes for employees to submit expense reports. The same report also found that an astounding 19% of expense reports are submitted with errors costing businesses $52 and an average of 18 minutes to correct an expense report.

Expense management automation drastically lowers the cost of processing expense reports, turning what was once a financial burden into a source of savings. Through streamlined processes, approvals, and reimbursements and eliminating costs to print, deliver, and physically store expense documents, finance teams can focus on projects that support the CFOs' more strategic visions for their teams.

Expense automation liberates finance teams from the time-consuming tasks of manual processing, allowing them to focus on activities that add more value to the organisation, such as ensuring vendor contract terms have been upheld. Forrester reports that 74% of travel and expense decision-makers view improving T&E processes and tools as critical to reducing costs and improving business efficiency1.

Expense management solutions streamline the creation, submission, approval, and reimbursement of expense reports, all with just a few clicks. The electronic submission of expense reports triggers workflow and approval processes, with automated emails updating managers and employees on the report's status. Employees no longer need to spend time each month filing paper receipts, printing monthly expense reports, or sending expense information to another office. Managers no longer need to reconcile expense information manually. Automation also drastically reduces the potential for manual errors.

1 2020 Forrester, via Amadeus

One of expense automation's paramount benefits is its enhanced visibility into financial operations. CFOs can gain real-time insights into spending patterns, enabling more informed decision-making and strategic planning. This transparency is crucial for maintaining budget discipline and identifying opportunities for cost savings.

According to Aberdeen Group, the average U.S. company budgets between six and 12 percent of total revenues for expense spending. With travel and entertainment spending representing so much of the typical company’s annual budget, finding ways to control spending is crucial to keeping expenses in check. Unfortunately, 28 percent of medium-sized organisations say they lack timely visibility into spend data, according to data from the IFP.

Expense automation puts data-backed insights at the fingertips of CFOs and other cash managers. According to PwC, top-performing finance organisations spend 20% more time than their peers on analysis than data gathering.

In an agile business landscape, making swift, informed decisions is a competitive advantage. Automated expense management systems provide CFOs immediate access to critical financial data, supporting strategic decision-making and facilitating more effective budget management.

The CFO’s role has evolved from a financial scorekeeper to a growth strategist. Making fast, informed decisions on cash flow and spending requires CFOs to have instant access to information. However, with a manual expense management process, CFOs and other organisational leaders cannot readily access the information they need for financial forecasts, cost and compliance management, and spending visibility across the business.

Automating expense management provides comprehensive reporting and visibility into spend data as it’s happening and provides CFOs instant access to actionable insights. These insights enable CFOs to quickly measure spending against budgets, manage budgeting, planning, and forecasting, identify budget overflows, and align spending with changing business objectives.

Automated expense management solutions can also identify opportunities for consolidating suppliers and equip sourcing teams with the data they need to negotiate supplier contracts. Finally, expense reporting helps eliminate delinquencies and late fees.

IOFM reports that CFOs are racing up the agenda to mitigate compliance risks. The fines, penalties, and reputational damage that result from compliance violations can stifle growth. Expense management automation strengthens regulatory compliance by providing transparency into expense spending. The onus for ensuring these controls and tracking procedures are in place typically falls on CFOs and controllers.

Automated expense reporting solutions provide instant access to expense data and built-in compliance features. For example, accountants and managers can set hard and soft travel policies into an automated solution. Employees are prompted when one of their expenses exceeds a policy limit, allowing them to alter or rescind their request for reimbursement. The expense solution then reviews the expenses and flags or rejects those not complying with the policy. Similarly, automation allows companies to easily audit travel expenses for each employee rather than rely on random, largely manual audits.

The above five areas empower the spend control and efficiency CFOs desire.