Company-wide EMS adoption: will these accounting members give it a thumbs up?

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Welcome to part 3 of our 4-part series on Travel & Expense (T&E), featuring a real U.S.-based multinational company with locations in 60+ countries. This blog explores the advantages of migrating to a paperless expense management system through the lens of two company leaders, Regional Accounting Manager Jay Iglesias,* and Account Support Specialist Mary Church.* Jay leads the company’s U.S. accounting operations, and Mary oversees their in-house expense management solution (EMS). As EMS has served the accounting department well, the duo is challenged to explore the idea of expanding it company wide.                                                                                                                                                                     

With your EMS migration, what improvements did you experience in the expense submission process?      

[Mary] Our process has become much easier, more streamlined. Each user has an EMS account to create expense reports online; no more signing on to SAP. Photos of receipts can be snapped with a cellphone and submitted via email, or uploaded via the web interface. The EMS automatically associates each receipt with the user’s email address. Users can log on via mobile or laptop to see all receipts in chronological order, waiting to be attached to an expense report. It’s that simple!

In your view, what are the advantages of EMS?      

[Mary] We’ve experienced numerous benefits very quickly. First, the EMS automatically checks for compliance on things like receipt attachment and food allowances. For example, for more expensive cities like New York, the tool re-calculates allowances accordingly.

Secondly, if an exception occurs, the system automatically prompts the traveler to report the reason why.

Thirdly, our travelers save time, because they no longer have to tape receipts to a piece of paper and mail physical copies to the accounting department. In real time, I am able to immediately check for compliance and exceptions. I can flag and return any issues to the traveler with the click of a button. We’ve eliminated physical mailing, which means no more postage and off-site warehouse storage costs. We’ve saved time and reduced clutter by eliminating drawers once stuffed with “on-hold” reports.                                                 

What savings have you realized with your new system?  

[Jay] First, we eliminated the cost of 100 SAP licenses, resulting in an approximate annual savings of up to ~$50,000. Previously, we needed 1.5 full FTEs (full-time equivalents) to review reports and check compliance. Today, Mary takes care of that herself and not as a full-time job. We also reduced by half the time needed to review an expense report. Before, a typical report took Mary 10 minutes to review. Today, a similar report takes three to five minutes. We’ve also reduced reimbursement turnarounds. What once took at least two weeks, now takes one – if all steps are correctly followed. Overall, we estimate the average cost associated with processing an expense report has gone from approximately $20-$25 (mostly labor cost) to an estimated $10 (labor + expense transaction cost) per report. That’s a 50%+ savings!  

Our new system has enabled us to work more efficiently. Previously, we processed approximately 300 reports per month; today, without accounting for organic growth, we do see that number is close to 500. And all of this can be handled by less than 1 FTE! First, we eliminated the cost of 100 SAP licenses, resulting in an approximate annual savings of up to ~$50,000. Previously, we needed 1.5 full FTEs (full-time equivalents) to review reports and check compliance. Today, Mary takes care of that herself and not as a full-time job. We also reduced by half the time needed to review an expense report. Before, a typical report took Mary 10 minutes to review. Today, a similar report takes three to five minutes. We’ve also reduced reimbursement turnarounds. What once took at least two weeks, now takes one – if all steps are correctly followed. Overall, we estimate the average cost associated with processing an expense report has gone from approximately $20-$25 (mostly labor cost) to an estimated $10 (labor + expense transaction cost) per report. That’s a 50%+ savings!  

Are there any disadvantages to using this – or any – EMS system?

[Jay]  Every solution has its pros and cons. We are less agile in our ability to change internal accounting processes. There are cost limitations when it comes to requesting system changes or custom developments. We must plan for additional response times and associated costs if we require system changes, new developments or deployments.

For example, let’s say tomorrow we decide we want to itemize, track and report hotel-related expenses in a different way. This is something our EMS has not been set up to do, so it would require extra coding time. Previously, SAP allowed us to make simple tweaks to quickly tailor reports the way we wanted.

Today we have to configure and tweak EMS to ensure it captures the traveler data properly, verifies exceptions correctly, and ensures all data ties in – and is correctly output – by the automated reporting to SAP.

Hypothetically, if you could significantly improve your process efficiencies and cost savings with the Amadeus cytric Travel & Expense management solution, would you consider it?

[Jay] From my perspective as an accounting manager, I’d say we’ve already experienced considerable time and cost savings. Plus, we’ve greatly improved the traveler experience. Even if I could expect 10 to 20 percent efficiency gains within our department, the benefits would need to translate across our entire organization. All travelers – including our CEO and CFO – would have to be on board. Top management must endorse, embrace, and use the new solution.

What if we could show you how an end-to-end solution like Amadeus citric Travel & Expense could have a positive impact across your organization?

[Jay and Mary]  We’d need to be convinced. However, we are open to learning more. Several colleagues – including our Travel Manager, Controlling Department Manager, and Internal Auditing team – have shared with us several benefits they say would be significant and quantifiable. So yes, please go ahead and tell us more!

 

This concludes our third blog about the pros and cons of migrating to a paperless expense management system. Will the benefits experienced by this company’s accounting department translate across the entire organization? Most importantly, will top management endorse company-wide adoption? In our next and final post, find out how an EMS solution can benefit the entire organization.

 

*Not their real names.

 

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