Further findings showed “it costs the Department of Internal Affairs about $55 to process a minister's receipt; $41 at the Ministry of Justice; $16.40 for the Ministry of Social Development; and $6.44 at the Ministry of Foreign Affairs.”
But this isn’t just an issue affecting the New Zealand government alone. Organisations of all sizes globally are finding that their manual expense tracking, approval and auditing processes are impacting their bottom line. In the United States auditors state that “It costs over $100 USD to process one receipt” (John B (JB) McCuskey, West Virginia State Auditor).
But why does it cost so much?
First, if you regularly claim back expenses how much time does it take you to sort through your receipts, input them into a spreadsheet or online cloud-based accounting system, and then submit them for approval? Additionally, how often do you have to amend or update your expense reports to get them approved?
Next, consider the approval process for expenses. How many levels of approval does your organisation have, and how much time does it take approvers to go through each individual expense and approve or decline? When you add billable hours into the equation you can start to see how a receipt for coffee and eggs can easily triple or quadruple in cost to the company.
The below table looks at the estimated costs of processing receipts and invoices for a company with 1,126 employees. Will just an estimate, this starts to create a picture of how much time and money enterprises are spending on this mundane and outdated practice.
Figure 1: Estimated annual receipts processing costs for a company with 1100+ employees
Where do you go from here?
Part of the reason why processing expenses are costing organisations so much money is that they haven’t adapted to changing times. Luckily there’s a solution.
Companies are now readily embracing more and more automation, whether it’s rolling out cloud-based accounting platforms, streamlining payroll processes or adopting automatic expense capturing.
RIP Global automates the expenses process from end-to-end, and in doing so, dramatically cuts costs associated with this frequently manual, and time-intensive task. Our intuitive, user-friendly, cloud-based expenses platform removes manual data entry, allows one-click approvals, and automatically generates expense reports.
So the question is… what would you do with the time and money saved? To find out more about how much money RIP Expenses could save you and your organisation book a session with a member of our experienced and friendly team.