Huge mismatch in Expectations vs Reality of going digital on spend management; 48% companies lack systems to detect the frauds as most T&E expenses are mapped manually; But, about 50% CFOs are becoming change agents & moving to full automation in the next 6 months
Happay unveiled a CFO Benchmark report titled ‘State of Indian Enterprise Travel & Expense Management 2018’. An independent study among 200+ Enterprise CFOs and finance heads across verticals has contributed to the findings of the report. This exhaustive research was undertaken by CFO India magazine; on behalf of Happay, to understand the current state of Travel and Entertainment (T&E) expense management across companies in India and the degree of automation in it.
In today’s digital era; where automation has become a necessity, the study revealed that most organizations function on an old and archaic system of expense filing. The report also highlights that 82% of companies are either partially or entirely lacking in making the whole T&E process automated despite it being the second-largest operational expense after payroll. About 50 % of the CFOs have understood this urgent need and taken digitisation upon themselves, to switch to an automated expense management system in the next 6 months.
According to Varun Rathi, Co-Founder & COO, Happay, “Some of the insights which came through this benchmark report are startling. Most CFOs are tired of half-baked automation, which is impacting the company’s bottom line. CFOs are now more focused upon the outcomes of their digital journey and getting the necessary technology integrations done, to make the automation process smoother”.
Expense fraud is one of the most overlooked types of fraud and entails a staggering cost for companies. Still, 48% of companies do not have a system to detect frauds as T&E expenses are mapped manually. According to Happay’s report, nearly 55 % of the companies stated their inability to retrieve past expense data as a key bottleneck in auditing and managing T&E expenses.
The report highlighted that 21% CFOs cited manual data entry of expenses and attaching of receipts as their biggest challenge. Another factor that makes the work of a CFO more difficult & time-consuming is lack of travel spend analytics (15%) around T&E expenses. This increases the workload of a Finance department furthermore.
Three-fourth of respondents in the study said, expense claims still had to be filed manually by attaching bills to paper vouchers. Quite surprisingly, despite the huge penetration of Mobile devices and desktops just 12% and 27% of companies allow employees to use these devices for recording travel claims.
What is more surprising is that 33% of the companies do not have GST compliant T&E solution and are unable to use any digital means to perform the calculations. Even though 67% of the companies have some GST compliant software, they still need the employees to submit tour bills and enter vouchers manually to claim input credit. The bigger issue is that wherever the company is using software to manage T&E it is assumed to be integrated with other systems, however, in reality, the data entry into the accounting system or ERP is being done manually by 59% of organisations.