Mastercard reports that travel and expense costs are usually an organization’s biggest indirect cost after labor. According to the report, it can add up to 11% and 23% of your business expense. That’s why digital transformation matters so much to finance teams. By transforming and automating spend management, companies can control and reduce expenses. At the same time, CFOs and finance controllers can get greater visibility into the business’ budgets and simplify the accounting process.
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:
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:
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.
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.
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:
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.
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:
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.
ATU, Germany's No. 1 car dealership and automobile workshop chain has over 10k employees, 550 branches, and €1.3B in annual sales. With such a large physical footprint, making purchases with cash was a headache that always generated endless reams of paperwork. ATU had to use two trucks to transport their invoices from their German branches alone.
That opaque structure slowed down financial operations and reconciliation and created room for potential financial abuses. Now, by using Payhawk's digital spend management tools, ATU's senior project manager Mathias Goetz says that:
"Branch managers can make payments via the Payhawk card, snap a picture of their receipt, add to the app, and select the right category (coding) and job done."
In the first year of using Payhawk, our automated data capture, mandatory expense categorization (with custom fields), and real-time reconciliation via ERP integration helped ATU recoup €2 million from the tax office that would have otherwise been lost if they depended on manual processes.
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.
Trish Toovey works across the UK and US markets to craft content at Payhawk. Covering anything from ad copy to video scripting, Trish leans on a super varied background in copy and content creation for the finance, fashion, and travel industries.