What is the real cost of Professional Expenses?
When we talk about professional expenses, we generally think about all the costs related to employees’ daily activities: transport, travel, food, etc.
But few people are interested in the indirect and hidden costs of these expenses. A recent study has highlighted the importance of these costs, and the figures presented will blow you away.
➡️ Indirect costs of expense management
When one of your employees makes an out-of-pocket expense payment, it triggers a process that is often very costly.
Filling in an expense report, retrieving the receipt, submitting it to the manager, who has to assess it before approving it and then passing it to the finance team who will analyse it and make the reimbursement. This whole process is very time consuming, and therefore costly.
👉🏾 50 minutes: The average processing time for a single expense report
👉🏾18 minutes: The additional time required when an expense claim is incorrect
👉🏾20%: The average rate of expense claims that need to be reviewed
➡️ Hidden costs of expense management
On top of direct and indirect costs, there are hidden costs. These costs are difficult to quantify and yet have a considerable impact on your daily activities.
👉🏾 Unproductive tasks
all the time your employees spend filling out and validating expense reports is time they are not spending doing their real job, the one that brings value to your company.
👉🏾 Dissatisfaction and motivation loss
One of your most important resources is the willingness of your employees to grow your business. Spending time justifying expenses only to be reimbursed weeks later is a major source of dissatisfaction and risks reducing employee commitment.
👉🏾 Fraud
Cumbersome processes and a sense of non-recognition may lead some employees to cheat and claim undue expenses
The situation is striking.
While the majority of companies focus on reducing direct expenses. It seems that reducing the costs of expense management is a powerful driver of efficiency and operational performance.
To achieve this, professional expense management platforms such as Bujeti have been developed specifically to streamline these processes. Digitalising your expense management will save you time, bring transparency and give you back control over your spending.
You can sign up to Bujeti today to start managing your budgets, issuing cards to your employees and set up spending limits and restrictions.
#fintech #africa #afrotech #innovation #corporatecard #expensemanagement
