Exclusive New Survey Shows True Cost of Managing Expenses for Australian Businesses
- Total cost of managing expenses over $8bn for Australian businesses with +250 employees
- These businesses face bills in excess of over $2m each for expenses management
- Almost 90% of businesses admit they have concerns over how they manage expenses
- On average, 364 staff are authorized to make purchases on behalf of the company
- 60% look to mobile payments as possible solution to current problems
Conferma has issued exclusive new research demonstrating that the average large Australian businesses are paying in excess of $2m in managing their corporate expenses. Research for the leading Virtual Card Numbers providers, carried out by Opinion Matters, is able to reveal that the multiple inefficiencies in how big Australian business manage expenses is proving a significant hit on their bottom lines.
Australia has 3,717 businesses with more than 200 employees and with an average annual cost of expenses management of $2,154,767 per business. Conferma can reveal that the total cost reaches a staggering $8bn. To put this number into context, it is more than double the Australian Foreign Aid budget.
Simon Barker, CEO of Conferma, explained: “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billions of dollars being wasted due to a confused landscape of multiple employees making multiple payments and using outdated methods to claim expenses. It is costing Australian business time and money to navigate this landscape and should be subject to much more rigorous control and oversight.”
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With the surveyed businesses having an average of 364 staff authorised to make purchases, managing these multiple expenses streams is proving expensive in terms of both time and money. All this lead to an incredible 90% of the finance professionals surveyed admitting they had concerns over how they managed their expenses.
When asked for specific examples of these concerns, one third (32%) said that the inefficiencies were costly to their business a quarter (25%) said that manual reconciliation was time consuming.
Simon Barker: “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.”
Management costs can be curbed through increased use of technology and automation. And this is something finance professionals who manage the expense claim system agree with. When it comes to addressing these inefficiencies, 60% of those surveyed point to employees being able to make purchases on mobile devices as a possible solution. Given the increasing popularity of mobile devices for personal finance and shopping, it is clear that businesses are ready to embrace mobile money for corporate life too.
When 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.
Simon Barker: “The technology exists to help solve this waste of $8 billion per year to the Australian economy . With innovations in banking technology and FinTech, there are ways in which a previously complex system can be streamlined and automated. The Virtual Card Number technology, as pioneered by Conferma, can automate and streamline expenses processes and dramatically reduce time and money spent on expenses management.”
“We are expanding into Australia and are opening a new office in Sydney. So we are well placed to start helping Australian businesses solve this multi-billion dollar problem.”
The full results from the survey were:
|In terms of staff and infrastructure costs, how much do you believe the management of your corporate expenses costs your company each year?|
|An average of $2,154,767|
|How many employees are authorized to make purchases on behalf of the company?||An average of 364|
|Does the way you manage corporate expenses concern you and why?|
|· Yes, because manual reconciliation is time consuming: 32.5%|
· Yes, because inefficiencies are costly – 25%
· Yes, because we are vulnerable to employee fraud – 23%
· Yes, because it is difficult to keep track of expenditure – 19%
· No -10%
|Given the rise of mobile business, do you feel that your business would benefit from authorized employees being able to make purchases on a mobile device?||Yes: 60%|
|Have you heard of Virtual Cards (a single use, unique virtual credit card number with a designated payment limit, use and date range, also known as Virtual Card Numbers, VCNs, Virtual Account Numbers, VANs or single use cards)?||· Yes and we are currently using them: 13%|
· Yes, but we do not currently use them: 31%