New research by leading fintech company Conferma says the total cost of managing expenses is almost $33bn for leading US businesses due to outdated corporate expense systems.
In the US there are in excess of 30,000 businesses with more than 500 employees, with an average annual cost of expenses management of $1,075,000 per business. Conferma can reveal that the total cost reaches a staggering $32.9bn.
The exclusive new research demonstrates that the average large US business is paying over $1m in managing their corporate expenses. The findings also reveal multiple inefficiencies in how big US business manage expenses, proving a significant hit on their bottom lines.
Simon Barker, CEO of Conferma, explained:
“What we are seeing here is billions of dollars being lost thanks to a confused landscape of multiple employees using multiple ways in business to claim expenses. It is costing US business time and money to navigate this landscape and should be subject to much more rigorous control and oversight.”
“Companies have to pay expenses; it’s a critical part of business life. Yet there is no additional reason why companies should face operational inefficiencies and excessive business costs. If something is difficult to do, it will cost time and money. And employees face unnecessary difficulties too; they have to remember to keep receipts, fill out expenses claim forms and then wait, sometimes for weeks, to be reimbursed by their employers.”
One way in which management costs could be tackled is through increased use of technology and automation. This is something Chief Financial Officers agree on. When it comes to addressing these problems, 90% of the Chief Financial Officers surveyed point to employees being able to make purchases on mobile devices as a possible solution.
The full results from the survey were:
– $1,075,000 Average staff and infrastructure costs of corporate expenses each year
– 90% Respondents who find it challenging to reconcile payments on a card used by multiple members of staff
– 66% Those concerned by time-consuming manual reconciliation
– 57% Those concerned by costly inefficiencies
– 42% Those concerned by vulnerabilities to employee fraud
– 38% Those concerned by difficulties in keeping track of expenditure
– 328 Average number of employees authorized to make purchases on behalf of the company
– 90.5% Respondents who feel their business would benefit from enabling authorized employees to make purchases on a mobile device
– 48.5% Those who know of Virtual Cards and are currently using them
– 42% Those who know of Virtual Cards but are not currently using them
– 40% Respondents who feel that Virtual Card Numbers would help solve their concerns over current expenses systems and payment methods (26% were unsure)
The research for Conferma was carried out between: 03/11/ 2016 and 03/18/2016 by Opinion Matters. The sample size was 250 Chief Financial Officers in company sizes of 500+ in the US.