One of the most common questions that we are asked when people are thinking about modernising their expense system is whether automated solutions are expensive.
In this blog, we want to look at the issues around this and give you our thoughts.
In our opinion, you actually need to break this down because what we are being asked is made up of two distinct questions.
Question 1 – How expensive is the upfront cost?
Back in the day, expense systems used to be really expensive to set up. Typically, they would be installed on the customer’s premises and would require server space.
Expense systems would need technical help to install them and this would require consultants and internal IT staff. Then they would need to be configured properly so that the solution would work for the company.
Thankfully things aren’t like that today.
Expense systems are now delivered mainly as Software As A Service (SaaS), meaning that they are hosted on the servers of the software company, so no big installation costs.
They are also really easy to configure. Yes, it will take some time from your staff to think about the sort of settings they want but in reality, the workload is pretty light. You’ll also need to think about the resources needed to provide information that makes the system work. But in general automated expenses systems today are much easier to operate almost ‘out of the box’.
The upfront cost, then, is likely to be largely confined to the value of internal resources required to set the system up and in today’s market that is very much lower than it ever was before.
Question 2 – How much does it cost on an ongoing basis?
This is something that has again changed massively over the years.
The method of charging used to be on a ‘site licence’ basis and adjusted for the number of users but the company would have to buy a block of users, sometimes paying for seats that weren’t filled. So there would be a high fee, plus more fees if the company added users.
Today, with the advent of SaaS, automated expenses systems are often charged on a per user basis only. This has the advantage of companies only having to pay for the users they have rather than having to buy a block that they may not use. This makes automated expenses systems much less expensive on a monthly basis and ensures that companies only pay for what they need. But there’s another way of looking at cost.
A great automated expenses system can save you money
With a manual system, or with an online system that isn’t automated including a good workflow method, you will be paying for people to manage the process.
If you look at how many hours are spent with people inputting into inefficient systems, managers taking time to authorise, finance staff having to collate and manually pay the claims and even accountants then inputting the data into the general ledger, then you can start to see how much money is wasted.
Automated systems free people to go and do things that add more value to the company.
Staff can get on with their work, managers don’t have to authorise simple claims that are within policy and finance staff don’t have to waste time inputting data that already exists in another system.
Automated expenses systems – Are they really expensive?
A great system will cost you money in terms of cash but the truth is that the set up of systems isn’t as onerous as it used to be.
Often, no dedicated resources are needed and configuration is a simple matter.
But more importantly, a great automated expenses system will save you costs in terms of hours spent by your staff managing with either a manual system or an inefficient old fashioned solution.
Modern systems are very inexpensive when you look at them in the round and any company that wants to refine its finance processes would be well-advised to look at implementing a new solution.