Expert Tips: How to achieve ROI through digital transformation

Understanding the ROI of digital transformation in finance.

The idea of digital transformation in finance is simple: it refers to using technology to simplify or speed up accounting or finance to increase accuracy, eliminate fraud, and save time so businesses and their finance controllers can focus on growth.

Take expense management, for example. Traditionally, there were two ways growing companies could manage purchases and expenses. You could issue a charge card to individuals or company departments for their costs or ask employees to buy stuff with their own funds and get reimbursed at month's end.

But, the shortcomings of both models are pretty glaring:

1. Using a charge card makes it easy for employees to make fraudulent purchases that stay unnoticed until the month's end or when your CFO (or accountant) receives an account statement from your bank.
2. Asking employees to spend their own funds on company expenses can stretch their finances and overextend their credit if they don't get reimbursed on time. It also creates a mountain of paperwork every month, meaning that the finance team is left in the dark about spending until the end of each month.

An expense management solution like Payhawk can eliminate the need for both models by allowing employees to spend company funds as pre-approved by finance controllers.

With Payhawk, you can:

• Limit how much and where (i.e., at which retailers) your employees can spend company funds
• Design multi-step approvals workflows for validating transactions
• Minimise endless admin work — no more stockpiling receipts until month's end
• Issue smart expense cards (and a connected app) to every employee with granular, in-built rules for what they can spend on
• Eliminate fraud by limiting ATM withdrawals and requiring receipts (and spend categorization) for every transaction
• Get real-time notifications of purchases employees make and query suspicious transactions

Key benefits of finance digital transformation for growing companies

The essence of digital transformation in finance is to reduce the manual admin, errors, and opacity that come with manually approving transactions or trying to correct them after the fact. And some of the biggest benefits are as follows.

Speed

The biggest advantage of digitizing financial processes is speed. Instead of waiting until the month's (or the quarter's) end, you can reconcile instantly, make more informed projections, and make strategic decisions around investments more confidently because you have a clear idea of how they will affect the business.

Eliminate fraud with increased visibility

Manual financial processes create room for error, from rekeying issues to employees misreporting their required reimbursement. And it's easy to miss these, especially when there are hundreds of similar expense reports, invoices, and receipts to collate and file away manually.

A digital financial system reduces error significantly since the card and the connected app record all transactions as they're made. And our OCR-enabled application can complete the receipt capture in just seconds (with the opportunity to set reminders and even card freezes for cardholders who still need to upload their receipts).

For instance, by using Payhawk for your accounting, every purchase an employee makes shows up on your financial control dashboard, and you can view the metadata (i.e., date and time, retailer, amount, tags, etc.) and request additional documentation (physical receipts) to validate purchases.

You can also bring your own cards to the Payhawk platform. With card linking, you gain instant visibility into all card transactions, enhancing the ability to monitor and verify expenses in real time, which further helps to eliminate potential fraud.

Reduce manual work

Tech-enabled financial tools help to close the loop and intervene in workflows that would have traditionally required manual human action, such as:

• Use OCR technology to capture details from receipts and match them against transaction metadata
• Automatically notify employees to upload receipts whenever they complete a transaction
• Integrate and share data with the rest of your business management stack
• Create automated workflows for approving expenses, resolving disputes, issuing expense cards, assigning (or editing) a payment card's budget, etc.

Reduce financial management costs

Digital financial tools reduce the cost of operating your finance department. By automating away manual tasks, you can run a tighter ship with a smaller team of controllers.

Best practices for implementing digital transformation in finance

A well-known statistic by Forbes says that anywhere from 70% to 95% of digital transformation projects fail — either because they didn't align with company objectives, went over budget, or didn't account for the training employees required to use the shiny new piece of tech, etc.

Here are some best practices that can help you make the switch to a tech-enabled finance infrastructure that will reduce your dependence on manual processes:

• Automate repetitive tasks with if-then workflows
• Build comprehensive reporting functions to highlight every transaction in detail
• Map out your processes for spend management, cash flow planning, compliance and regulatory reporting, forecasting, treasury management, etc., and eliminate redundant steps
• Build powerful workflows by integrating applications across your financial stack
• Use a mature solution — building financial products in-house can be expensive and bring compliance and security responsibilities
• Adopt more robust security and data privacy standards

Payhawk powers successful digital transformations

At this point, you already get the gist: if you're looking for a reliable, tech-enabled expense partner to help you digitize your company's finances, Payhawk is what you need.

But don't take our word for it. Instead, you can hear what some of our customers say about our product.

Wellpointe Inc - a leading provider of boutique residential assisted living services, was facing major challenges as they grew. Managing financial processes across multiple entities and geographies was really time-consuming, especially when it came to mergers and acquisitions (M&A). And their old method of handling credit card spend via a banking institution (without deposit) was particularly tedious and painful.

Now, by using Payhawk's digital spend management tools, Wellpointe's CEO & Co-founder George Kutnerian says that:

"A tool, technology like Payhawk, helps us see how things are going in real time and benchmark against our game plan. We can pivot and adjust whether it's month two or month three post-M&A, meaning we're not waking up in month nine and worrying that we're not going to hit where we need what we need to hit by the end of year one."

In the first year of using Payhawk, Wellpointe Inc, were able to eliminate their manual, error-prone allocation processes and leverage real-time data to achieve continuous financial closings — enhancing their FP&A capabilities. They are also able to track each subsidiary's expenses accurately and automatically, helping them further reduce workload, improve data accuracy, and regain control over spending.

Sounds familiar? If paper receipts and data entry are holding you back, then it's time to learn how Payhawk can streamline your finance operations and deliver tangible ROI. Book a demo today.