The average large Australian business pays more than A$2m (US$1.45m) annually in managing its corporate expenses and almost 90% of the country’s major corporates admit to concerns over how they manage expenses, according to a survey.
Asked for specific examples of their concerns, one in three survey respondents said that inefficiencies were costly to their business, while one in four said that manual reconciliation was time consuming.
The research, conducted by pollster Opinion Matters for financial technology (fintech) company Conferma, a specialist in virtual card number (VCN) technology, suggests that Australian businesses with at least 250 employees collectively spend over A$8bn per year on managing expenses. The total is more than double the Australian foreign aid budget.
The surveyed businesses typically have around 364 staff authorised to make purchases, pushing up the cost of managing these multiple expenses streams. “What we are seeing here is billions of dollars being wasted due to a confused landscape of multiple employees making multiple payments and using outdated methods to claim expenses,” said Simon Barker, chief executive officer (CEO) of Conferma.
“It is costing Australian business time and money to navigate this landscape and should be subject to much more rigorous control and oversight. Companies have to pay expenses; it’s a critical part of business life. Yet there is no additional reason why companies should face operational inefficiencies and excessive business costs.
“It is clear that the finance professionals we have spoken to are very concerned about the management of expenses and, with the costs that we have identified, it is easy to see why there is such concern. A business spending $2m a year on expenses management is not a business operating at peak efficiency.”
Respondents generally agreed that management costs can be curbed through increased use of technology and automation. Of the finance professionals surveyed who manage the expense claim system 60% mentioned the ability of employees to make purchases on mobile devices as a possible solution. Asked about the growing technology of virtual card numbers, 44% of the finance professionals surveyed said that they had heard of them with 13% currently using them.
Far and away, the largest financial market on the planet is the foreign exchange currencies market, where on average individuals and organisations trade more than $5 trillion daily. In the FX world, the ability to master the market isn't considered a luxury for treasury officers–it's a necessity.
With the end of 2017 fast approaching, many finance professionals might be counting down the days with some degree of dread. Year End is just around the corner and with it comes the many long hours accountants will spend going over balance sheets and profit and loss accounts, investigating account irregularities and chasing sign offs.
Treasurers are more interested in cross-border payments and automation than real-time payments, as they are consistently asked to do more with less, argues Rick Burke, head of corporate payments at TD Bank in an exclusive interview.
On the third day of the Singapore Fintech Festival conference, there was a focus on specific applications of fintech innovation. One was trade finance, which is clearly is ripe for a revolution.