Jayant Dwivedy offers tips on expense management solutions and looks at what drives companies to look for such options
What is expense management? It refers to a system deployed by a business to process, pay and audit employee-initiated expenses. It includes policies and procedures which govern spending as well as the technologies and services utilised to process and analyse the data associated with it.
The software to manage expense claims, authorisation, audit and repayment processes can be obtained from organisations that provide licensed software, implementation and support service. Expense management automation has two equally important aspects—the process an employee follows in order to complete an expense claim and the activity accounts the finance staff undertakes to process the claim within the finance system.
Expense-management automation is the means by which an organisation can significantly reduce transaction costs and improve management control while logging, calculating and processing corporate expenses. Independent research evaluating the use of automated expense management systems (EMS) has confirmed that the cost of processing an expense claim significantly reduces as the level of automation increases.
THE PRE-REQUISITES OF SUCH AN EMS SYSTEM ARE:
- The software provider should empathise with the business requirements of the client organisation and at the COMsame time bring in innovation and best practices that drive the desired spend behaviour.
- The sponsors of an EMS implementation within an organisation usually display a visionary approach so as to capture the strategic needs of top management which they represent and the business at large going up to the front-end users (some of them in remote locations). Again it is a case of internal customer centricity!
Here are a few responses from a few users:
Neeraj Basur, director, finance, MAX Bupa Health Insurance, had the following to add about the company’s early implementation of an enterprise solution which he adopted and sponsored: "It was vital for Max Bupa as a start-up health insurance venture to create awareness and consciousness across the organisation on the need and importance of managing our cost judiciously and in the most prudent manner. We also wanted our people to get their productivity focus in place by eliminating time and effort spent on non-core, non-value-adding administrative activities such as expense management paperwork. We want to inculcate the culture of prudent cost management to obviate the necessity of "cost cutting” at any stage. We believe BAZ provides us the required platform for our cost management requirements….”
Hundreds of categories of common spend items across most organisations make a robust and standard EMS an important ingredient in the success story of spend control. The pharmaceutical industry, too, has the perennial problem of driving expense management at its sales-representative level. One such innovative implementation that has allowed transaction-level budget control has been at the Bangalore-headquartered Allergan India.
On his part, K T Rajan, director, operations, IS & Projects at Allergan India, says, "Expense management is a prime area of concern for most organisations. More so in the pharmaceutical industry where in a large portion of the actual spenders are on the ‘field’. The entire process from budgeting through to payables is complex. This gets further compounded by the fact that people are always on the move and most activities are dynamic, have short life-cycles and need to be executed swiftly. The workflow has to accommodate quick turn-around while maintaining the process rigour, with adequate checks and balances. BAZ solution enables us to manage the entire process from budgeting through to payables, online, real-time … A host of aggregation is possible from the transaction level which
facilitates extensive analysis and intelligent decisions. Overall, it enables us to spend smarter realising optimal benefits.”
Compliance and productivity improvement has been the key driver for the EMS rollout at Bharti AXA Life Insurance. And the company’s CFO V. Srinivasan said: "BAZ has helped us bridge one of the fundamental internal control requirements of procure-to-pay system. For an industry which inherently deals with a large number of employees that too spread across the nation in as many branches, a system like BAZ is vital. We have now rolled out every module of BAZ and have activated most of the control features. When rolling out the solution, managing the change was our key challenge hence we have kept on communicating and holding road shows to overcome this challenge. We have observed that our turnaround time has improved and the size of the accounts payable team has continually come down leading to significant benefits.”
"BAZ application addresses the service industry needs of multi-location controls, paper less processing and tracking/ adherence to turnaround times [from requisitioning to ordering to receiving to invoicing to pay ment] seamlessly and cost-efficiently.” prophesizes Raman Garg, Deputy CFO, MAX New York Life.
Sangramjit Sarangi, head, finance, SBI Life Insurance Company Ltd., adds that "BAZ expense management system has helped in tracking our expenses at granular levels (cost centre, location, employee, item), providing better and qualitative data for deciinpractice_ paysion making and controls. It also acts as a repository for the financial policies of the company ensuring compliance for all types of expenses with strong financial process workflows. We have been able to effectively execute controlled decentralisation of expense payment processing.”
Well, finally, success comes through appropriate selection of a robust enterprise-wide EMS tool, a focused and well-sponsored top-down implementation and cross-functional team work within organisations. We will be a leader in the enterprise spend process management space by focusing on customers, our people and our core values. We are ready to compete with the best in the world, in the space of expense management and control. BAZ delivers "compliance by design” and helps organisations manage spend by integrating what is not achieved in most cases—the bottom of the pyramid.
