A new SAP® Concur® commissioned study revealed that the potential economic loss across Asia Pacific due to inefficient finance and administrative processes could amount to US$21.5 billion.
The survey, entitled “Finance in the New World of Work”, aims to inform business, finance, and HR decision makers of the economic cost of poor finance and administrative processes and systems in the region. It also identifies the gaps in organisations’ expense management, business travel, and remote work processes.
Asia Insight, which conducted the survey, used International Labour Organization (ILO) statistics on output per worker and the number of information workers, and the study’s results, to calculate and derive that saving just 10 percent of the time spent on filing and approving claims would translate to US$21.5 billion of potential GDP revenue gain for Asia Pacific each year, assuming all the lost hours are diverted to productive work. Mid to large-sized organisations could save tens or hundreds of thousands of dollars2 over the same period.
As much as 38 percent of respondents submit expenses manually by filling out a form and enclosing physical receipts. Such a manual process is tedious, error prone, and incongruous with the digital lifestyles employees are leading today.
“With the unprecedented number of people working from home in 2020, this is really a watershed year for companies to manage employee productivity. While remote workers are well supported digitally in many areas, crucial yet often overlooked finance and administrative processes remain painfully manual,” said Andy Watson, Senior Vice President and General Manager, Asia Pacific Japan and Greater China, SAP Concur. “This takes up significant time that could otherwise be used for productive, customer value-added work. The situation is costly to businesses and creates more challenges in the current economic climate.”
Employees spent an average of 4.5 hours per month filing expense claims – about half a typical workday. Managers had it worse – they spent 6.1 hours reviewing and approving expense claims, in addition to the 4.5 hours they spent submitting their own claims. That added up to an astonishing 10.6 hours a month.
“Tweaking the process for something as seemingly trivial as expense claims can have a large multiplier effect on business and economic costs,” said Adrian Tan, Managing Director, Asia Insight. “During this period when many firms are trying to do more with less, finance and administrative processes are definitely areas they should not forget to scrutinise for savings.”
Finance Transformation is Lagging in Asia Pacific
Beyond the tedium (49 percent of respondents say they are less than satisfied with their organisation’s expense claims process) and inefficiency costs, the study also found that current expense management systems’ support for modern payment methods is inadequate. Close to a third (29%) of respondents said they want their expense management software to integrate with external apps to enable added functionality like reimbursement of payments made through super apps (umbrella apps containing other apps).
There is also clear potential for mobile wallets to be better supported as a payment mode for business purchases, as mobile wallets are much more favoured for personal purchases than company purchases.
Room for Improvement in Business Travel
The preference for all things mobile and digital includes business travel, too.
Corporate travel systems that enable staff to book flights and accommodations digitally and via mobile, perhaps even on their usual personal travel booking platforms and apps, help keep them happy.
Travellers also want mobile-based features like real-time alerts of danger spots and the ability to make itinerary changes on-the-fly via mobile, as well as seamless travel management with a high degree of personalisation.
Unfortunately for many organisations now, business travel management is piecemeal and disjointed, leaving 41 percent of employees less than satisfied with the time and effort incurred.
Opportunity for Organisations to Embrace Remote Work for Better Business Outcomes
Remote work will be the default mode of work for many organisations in the foreseeable future.
While 60 percent of the respondents said they feel more productive working from home, 34 percent of employees cited the loss of productivity during official work hours due to distractions as their top challenge. Therefore, companies are now at a point where they can adapt their operations to make remote work a boon to them or do nothing and let it become a hindrance.
Survey respondents want their employers to enable easy remote claims and travel management, improve collaboration, and provide better IT equipment and services.
Recommendations for Transforming Finance Operations
Almost two-thirds (65%) of employees felt a very strong or somewhat strong link between their overall finance and administrative experience and their overall satisfaction of working for their firm. This suggests that if businesses want to retain their talent, they need to improve their finance and administrative processes.
Here are three recommendations for businesses:
- Automate Expense and Business Travel Management
Automation takes repetitive, manual aspects out of routine finance and administrative tasks, saving employees time so they can focus on meaningful work.
It also saves time for the finance team by eliminating paperwork and detecting erroneous or fraudulent claims. Just as importantly, automated solutions provide visibility and control, and facilitate compliance.
- Make Business Travel More Streamlined and Personalised
Travel managers should revamp their travel management systems by:
- Enhancing controls: Reviewing their travel policy to better control costs; moving to digital receipts; and aligning their expense and travel policies
- Improving visibility: Integrating their travel and expense systems to facilitate data flow; considering app-based bookings that still stay within corporate policy; and improving budget and spend reporting
- Bolstering duty of care readiness: Ensuring they know travellers’ locations at all times and be in a position to render assistance
- Align Systems and Tools to Optimally Support Remote Work
Organisations must make their infrastructure and processes conducive for remote work. This includes digitising paper receipts, allowing vendors to invoice organisations directly for their employees’ purchases, and deploying experience management tools for better collaboration.
Companies should also review their expense policies to ensure staff are properly reimbursed for items or services used to facilitate remote work.
Adoption of the above recommendations will lead to an efficient, agile, and innovative finance organisation, which can better support the business in delivering value to customers, helping it become more resilient for the new era.
For full recommendations and other findings, download the SAP Concur Finance in the New World of Work study report at www.concur.com.sg/newworldofwork
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