The wave of digitization during the COVID-19 pandemic was swift and revolutionary. Businesses have had to act quickly across every sector of their operations just to stay competitive in a dramatically different world. Now, a recent PwC survey reports that 60% of C-suite executives say a digital transformation will be their company's biggest growth driver in 2022.
As more employees resume business-as-usual activities, such as sales visits and attending in-person events, this brings with it an influx of expense reports. Companies already digitizing their expense reporting are ahead of the curve. But because these back-office automation tools will only continue to evolve, companies must remain competitive by continually reevaluating their growing range of capabilities. Refining these processes can ensure their expense reporting management continues to save time and money — even in fast-changing business conditions.
The Current State of Expense Management
As the pandemic took hold, some businesses had to rush into digital platforms. As a result, 47% of businesses surveyed by Emburse used dedicated expense software in 2021, up from 35% in 2019. And yet, at the same time, expense report violations rose 292% in 2020. This means businesses are having to get — and stay — savvy about how they manage expenses: not just to streamline processes, but also to reduce fraud and get valid expenses paid more quickly.
Studies suggest digital adoption is one of the biggest COVID-19 takeaways for businesses — and central to how businesses adapt for the future. “The pandemic has forced enterprises to explore new ways to enable remote work, manage supply and demand, and remain competitive,” said Prashant Kelker, partner and Americas leader, ISG Digital. “Providers are supporting transformations that involve not just technology but a company’s entire operations and organization.” As expense reports begin to take on new complexities, digital expense tools must expand their capabilities for a new era of expense management.
The Next Chapter of Expense Digitization
Because the pandemic forced business leaders to pivot and cover their losses in 2020, many were left with heightened cash flow concerns. As automation evolves, newer tools are becoming more lightweight and can better simplify expense report submission, processing, and payment. Businesses need to continually reevaluate their expense report management tools and processes to ensure that, no matter how much the business landscape is shifting, they can mitigate unnecessary costs, maximize their working capital, and reduce fraud.
A recent Forbes article touted four areas where technology can improve expense reporting management:
- Proactive policies: Rather than a reactive policy to control employee spending, employers can incorporate proactive policies, such as corporate cards with built-in spend limits.
- Virtual cards: These single-use cards can be used for online payments. Smart physical cards can also tie purchases directly to a business's spending policies so that finance teams can easily report, track, and analyze spending patterns and behavior.
- Fraud reduction: Unique and dynamic 16-digit virtual cards digitally generated for each transaction can help protect companies in case of a data breach.
- Real-time insights: Recognizing the why, when and where of a purchase prevents managers from having to chase down employees with questions. And finance leaders don't have to wait for monthly reconciliations to see how employees spent company money.
- Communication with other digital tools: Automation tools can integrate into your existing cloud-based enterprise resource planning (ERP) setup to make it easier and more efficient for general ledger (G&L) teams to process and reimburse expense reports as employee and business needs change.
As automation tools expand their capabilities, companies are looking for new ways for their digital tools to integrate with others, thus streamlining and automating tedious work.
Learning and Growing Through Digital Disruption
The pandemic has created unique challenges for businesses, many of which are net-new to the global economy. The ways in which businesses have reacted are varied, and companies that were already technologically advanced adapted quickly. Others that might have held back on adopting tech were caught flat-footed.
Now, with over two years of major economic disruption in the rearview, many business leaders will continue to learn and grow through tech disruption. Companies that continue to evolve with the latest automation tools will create savings, encourage user adoption, and help distributed and remote teams work together smoothly.