Corporate India are Prone to Error & Fraud: Happay CFO Benchmark Report
Happay's independent study among 200+ Enterprise CFOs and finance heads across verticals has contributed to the findings of the report. This exhaustive research was undertaken by CFO India magazine; on behalf of Happay, to understand the current state of Travel and Entertainment (T&E) expense management across companies in India and the degree of automation in it.
Happay, Business Spend Management FinTech company, unveiled a CFO Benchmark report titled ‘State of Indian Enterprise Travel & Expense Management 2018’. An independent study among 200+ Enterprise CFOs and finance heads across verticals has contributed to the findings of the report. This exhaustive research was undertaken by CFO India magazine; on behalf of Happay, to understand the current state of Travel and Entertainment (T&E) expense management across companies in India and the degree of automation in it.
In today’s digital era; where automation has become a necessity, the study revealed that most organizations function on an old and archaic system of expense filing. The report also highlights that 82% of companies are either partially or entirely lacking in making the whole T&E process automated despite it being the second-largest operational expense after payroll. About 50 % of the CFOs have understood this urgent need and taken digitisation upon themselves, to switch to an automated expense management system in the next 6 months.
According to Varun Rathi, Co-Founder & COO, Happay, “Some of the insights which came through this benchmark report are startling. Most CFOs are tired of half-baked automation, which is impacting the company’s bottom line. CFOs are now more focused upon the outcomes of their digital journey and getting the necessary technology integrations done, to make the automation process smoother”.
Companies lose significant amount of money to fraudulent claims:
Expense fraud is one of the most overlooked types of fraud and entails a staggering cost for companies. Still, 48% of companies do not have a system to detect frauds as T&E expenses are mapped manually. According to Happay’s report, nearly 55 % of the companies stated their inability to retrieve past expense data as a key bottleneck in auditing and managing T&E expenses.
Rathi goes on to add “In our experience, CFOs are the real change agents or visionaries. Despite the resistance from internal teams, they are taking hard decisions to get real-time visibility into T&E spending by moving into an era of system-driven policy compliance in order to stop fraudulent claims.”
CFO speak: Manual data entry and lack of analytics are the biggest challenges faced by CFOs
The report highlighted that 21% CFOs cited manual data entry of expenses and attaching of receipts as their biggest challenge. Another factor that makes the work of a CFO more difficult & time-consuming is lack of travel spend analytics (15%) around T&E expenses. This increases the workload of a Finance department furthermore.
Three-fourth of respondents in the study said, expense claims still had to be filed manually by attaching bills to paper vouchers. Quite surprisingly, despite the huge penetration of Mobile devices and desktops just 12% and 27% of companies allow employees to use these devices for recording travel claims.
Significant number of corporates have not realized the importance of automation in respect to GST:
What is more surprising is that 33% of the companies do not have GST compliant T&E solution and are unable to use any digital means to perform the calculations. Even though 67% of the companies have some GST compliant software, they still need the employees to submit tour bills and enter vouchers manually to claim input credit. The bigger issue is that wherever the company is using software to manage T&E it is assumed to be integrated with other systems, however, in reality, the data entry into the accounting system or ERP is being done manually by 59% of organisations.
“There are enough data points to prove that fully automated T&E has resulted into paperwork reduction by 96% and plugging leakages by 90%. Digital CFOs are more confident and are showing the urgency to adopt the new age, mobile-based solutions”, added Rathi.
Pain points of employee:
According to Happay ‘State of Indian Enterprise Travel & Expense Management 2018’, more than 65% of companies record employee expenses manually. Nearly 54% of companies are unable to provide their employees visibility about the approval status. Hence, employees and back-office teams keep spending a significant amount of time and effort in follow-up & claiming reimbursements.
Anshul Rai, Co-Founder & CEO, Happay said, “With Happay’s AI capabilities, employees can create and submit expenses without any manual data entry any source – like transaction SMSs, from the invoices they receive in their email inbox, from travel vendors & aggregators, auto-receipt scans, in addition to Happay Card transactions, etc. Employees can use the Mobile application to submit their expense reports, track where their report is in the approval process.”