The
money maker
3. A word on growth 4. Time to grow 6. Travelling lightly 6. In plain English 9. By the numbers 10. On everybody’s lips
In association with:
INTRODUCTION
Welcome BY DAFYDD LLEWELLYN, MANAGING DIRECTOR SMB & NATIONALS EMEA, SAP CONCUR
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hile political and economic uncertainty seems to be the prevailing theme for 2019, it’s encouraging to see it hasn’t thwarted businesses’ aims towards strong financial growth. SAP Concur recently surveyed 500 finance leaders in the UK and it was reassuring to learn 96% of businesses are expecting to grow in the next two years, despite the macroeconomic obstacles thrown their way. Rather than fearing the unknown, UK businesses, especially SMEs, are up for the challenge. They’re increasingly seeing finance as an innovative function that can equip them with data and insights to make informed decisions that enable growth by protecting their bottom line, investments and employees. With deeper insights into where, how and when spending occurs, finance can deliver true intelligence to businesses by helping anticipate risk, see around the corner and protect company profitability. It will become increasingly important to understand how to optimise what’s being spent on travel, expenses and invoices so companies can cut surplus costs and negotiate discounts with preferred suppliers. Keeping spend lean and operations nimble will help them adapt in the moment to any curveballs, while freeing up capital that may be better directed towards growth and investment plans. Now is also the time to scrutinise how your current finance operations are set up. Businesses that are geared for growth won’t be slowed down by patchwork systems and error-prone manual processes that don’t scale as they grow. Time and again we see paper-based processes struggle to keep up with businesses, especially as they look to expand into more locations and countries. This creates risk and uncertainty around compliance and tax that most companies try and avoid. The remainder of 2019 is going to be a challenge and the ability to quickly change course will be key to making the most of the opportunities that come up, however they present themselves. Accelerating success in the midst of so much uncertainty will require resilience, determination and an adaptable mindset underpinned by a flexible approach that supports growth, innovation and expansion. With the right processes, visibility and tech in place, UK firms can give themselves the best chance of profiting from changing market conditions and realising their growth ambitions. If they do, the boost won’t only benefit business but society and the wider economy too. THE TIME TO GROW | SAP CONCUR
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GROWTH
Time to
grow
Despite present economic ambiguities, growth is on the minds of many businesses. And with the help of some tech, it’s an amazing time to storm ahead of the competition
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t would appear the country simply isn’t growing the way we’d like it to, with the British Chambers of Commerce forecasting 0.1% less growth in 2019 compared to its original prediction and 0.2% less in 2020. Moreover, business investment is set to drop by 1% this year, marking the weakest outcome since the 2009 financial crisis. But that’s no excuse for companies to follow suit. In fact, while surrounding competitors feel the heat it’s a better time than ever to up your game and actually grow in this economic firestorm. Many seem to have taken the hint. Despite the turmoil, an overwhelming 99% of finance executives quizzed by SAP Concur, the spend management leaders, cited expansion as a priority over the coming years. To achieve it, the same proportion have set their own growth objectives – 76% of which are very or extremely optimistic they’ll reach. However, there’s no hiding that the majority are smiling in the face of adversity, as 98% recognise there are plenty of hurdles to leap over in order to access their goals. Specifically, 43% identify IT and finance infrastructure as a big short-term challenge while 36% can say the same for the long term. In this day and age, such a prospect is absolutely crippling. For instance, with the government’s Making Tax Digital programme now in flight, forcing all businesses earning over the VAT threshold to submit their VAT
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GROWTH
returns online, even the simplest company doesn’t stand a chance to survive without fintech solutions, yet alone thrive. To get ahead of the starting gun it’s important to not delay in cracking on with what’s inevitable. But surprisingly the digital push isn’t motivating many to take the hint and go above the bare minimum. “Nearly half of all global business transactions – [£46tn] in 2016 – are still done on paper, while subscription businesses can lose up to 4% of customers every month through avoidable payment churn,” claims Duncan Barrigan, VP of product at GoCardless, the payment company. Indeed, refraining from digitising finances is a big mistake, with 56% of financial decision makers at SMEs struggling with lost paperwork according to SAP Concur. It’s not only frustrating for them but hits businesses where it hurts. “In [the] business services sector, poor payment management can deprive businesses of the cashflow they need to keep the lights on and 80% of small business owners say payment uncertainty means they can’t grow their business the way they want to,” Barrigan adds. That’s why just doing something because it’s law is no way to grow. Given your paperwork will be digitised one way or another in light of the Making Tax Digital enforcement, upgrading to financial automation is the very next step to growing taller than the rest. “What are you waiting for? Do it sooner rather than later because it will transform your finance processes,” attests Laurence Harper, finance systems analyst at DAS, the legal expenses insurer. Having AI take care of invoices and expenses, including giving over 600 employees the option to submit the latter on the go through mobiles, has seen this company save nine hours per week across its accounts payable
team. “We’re also able to be much more proactive in improving finance efficiencies,” Harper adds. Automation is also versatile enough to target specific pain points of a business. Take DRC Capital, the investment advisory firm, for instance, which opted to automate the travel expenses of its 16 partners. “The main benefit is that I can send details of flights, hotels and taxis to the tool and it automatically produces a travel itinerary, which is brilliant,” says Maria Santos Roman, office manager at DRC Capital. As a result, she’s able to eliminate small delays that build big barriers and a time vacuum to growth. “Before I would have to type everything up, so it took a lot of time and there was always the risk of an error,” Santos Roman explains. In fact, top-notch expense management isn’t just designed for those boasting hundreds of employees or exotic travel. It can be an ace up the sleeve for all kinds of companies simply seeking security. “In an environment where we’re seeing more cybercrime targeted at the charity sector, it’s important our controls are extremely strong and we’re protecting the money our donors give us for the benefit of our patients,” says David Hawes, finance director at Devon Air Ambulance. Despite flying from high altitudes, the charity couldn’t gain clear visibility on invoices that appeared to come from within the organisation. But scammers can’t easily deceive when there’s a trained robot producing all kinds of info to cross-examine. “We can instantly pull up an invoice, cross-reference against the PO, check bank details, search historical payments and reduce the risk of error,” Hawes says. Having an efficient finance system is without a doubt the most basic feat every company should strive for. THE MONEY MAKER | SAP CONCUR
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PROFILE
Travelling
lightly International travel is a bare necessity for employees of companies like RED. However, with so much expense paperwork coming with it, progress can quickly stall without the right technical support on hand
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S A GLOBAL STAFFING AGENCY with seven offices across Germany, Switzerland, Britain and the US, it needn’t be said RED’s employees get out and about a fair bit. Nonetheless, there was a time when the business made it a gruelling task. Whenever needing to jet off for business, Luke Braham, head of technology operations at RED, says employees were stifled by challenges. “There was no formal approval process and expenses were done with receipts and spreadsheets, so there was a lot of printing and a lot of paper,” he describes. It seemed like only positives could come out of digitising the paperwork where both headaches and money could be saved. “We also believed it would save time and therefore money and even reduce headcount, so the product would pay for itself very quickly,” Braham reasons, detailing the expectations. As head of tech, Braham was tasked with hunting down this dream solution. Rightfully, he wanted to get the most in-depth remedies from a provider given how integral travel was to RED, not just surface levels of expense management. As a result, Concur Expense stood head and shoulders above alternatives. “We liked the multiple layers we could look into further down the line that would help us improve processes and how we use our data,” Braham says. RED gave its green light and the solution was put to the test. Right off the bat, processing travel expenses became an ongoing process rather than last-minute dash, meaning everyone had enough time to do the job properly. “End users can work on their expense claim
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RED
throughout the month rather than doing it at the end of the month, receipts don’t go missing and there’s no chasing either,” Braham says. With its appetite whetted, the business wanted to see what else its provider could do about its vital travel procedures – and it turned out to be a whole lot. The answer was initially taking on Concur Travel and TripLink, which sees all bookings pass through the SAP Concur systems to ensure they meet internal policies and that inconsistencies don’t slip by unnoticed. “As with expenses, we have a clear audit trail for travel,” Braham describes. From then on it was a snowball effect with the addition of Concur Locate, which details world events that may affect RED’s business; Concur Invoice, which automates the capture, approval and processing of supplier invoices, and Concur Active Monitoring, an around-the-clock communication and coordination system for employees on the move. “Everywhere is a high-risk area now and we have a duty of care,” he says of the latter. “We now have a risk management system in place to address this.” It wasn’t long before RED’s provider had an eye on every angle of its travel expenses. With this royal flush of a tech suite, every way that RED’s employees travel and spend is tracked and optimised. It’s enabled some seriously tactical decisions, such as when Braham pulled up a report in six seconds that showed £67,000 was splashed out on taxis in 2017 alone. “I was therefore able to suggest
that if we moved to Uber Business we’d have predicted yearly savings of £20,000,” he says. On another occasion, Braham clocked £27,000 worth of unauthorised cash going to Amazon completely unnoticed. “We’ve now moved to a single Amazon Business Account,” he says. “The spend will be approved going forward, which is a big benefit.” It’s partly thanks to the fact that each area – from travel to expense and invoices – is streamlined through one tool, avoiding a piecemeal operation from multiple employees. “Travel can be booked by the traveller in five minutes whereas when office managers did the booking it could take days,” Braham says. In fact, the efficiencies extend so far that entire roles have been reworked to serve the needs of the business in much bigger ways. “We’re not getting rid of those people but they’re now freed up to do the things that are important because they’re not booking travel or sorting expenses for 15 people,” he explains. Having experienced this revolution to the most important part of its business for two years now, Braham can’t imagine going back to the dark ages. “We work very closely together,” he says. “It’s nice to know I can pick up the phone and get things done.” And for fellow tech honchos, expense managers or business owners, Braham sees no situation where financial automation won’t be useful. “You can use it in a business of ten just as easily as you can use it in a business of 10,000,” he advises. “It’s definitely a scalable product.”
THE MONEY MAKER | SAP CONCUR
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JARGON-BUSTING
In plain English
There is an affinity toward the use of financial jargon, making simple concepts appear complicated. But we’ve cut through the clutter to clarify them
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hrases like financial automation, machine learning and invoice processing can bewilder anyone that isn’t a whizz with numbers. But it’s important to understand what they mean when you’re running a successful, growing business. So here’s the jargon in plain English. Financial automation Ultimately, financial automation is a process that robotically reviews all company finance data through the use of software. This means processing every figure to show who’s owed what, what’s going in and out of the company, where cash is and isn’t being spent and so on. Indeed, with the vast amount of data companies handle today, manual number-crunching can be a process either too mundane or too high risk for errorprone humans. So with resources often being tight in SMEs, having AI take the reins frees staff up to expand the business. Machine learning This is AI that can predict what’s going to happen and make decisions based on memory, patterns and trial and error, without the need for human intervention. Such independence has fuelled imaginations behind
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dystopian nightmares but, in reality, machine learning is one of the best tools businesses can have. That’s exemplified no better than with finance, where intricate monetary calculations difficult for humans to contend with can be left completely to a robot’s expertise once defined. In fact, with the power to learn and grow on its own you can think of machine learning AI as a staff member. Invoice processing Quite simply, this is the way a company receives invoices into their business – whether that’s by post or email – and its progress through business approvals to sign off. But not so simply, there are many caveats involved. Usually, an accounts payable clerk picks up the new invoice, checks its validity, classifies it into one of many categories and sends it to the employee responsible. They then cross-reference the invoice against the original purchase order, sign it off or defer it to a superior if the sum requires it and finally file it in the accounting system, provided there are no inconsistencies along the way. Every company handles this necessary process differently but, needless to say, it’s time-consuming for many people and not just the accounts payable clerk(s). That’s why automated systems are frequently adopted in this part of the business.
THE FACTS
By the
numbers
26%
of a team’s time can be saved with fullyautomated procedures, finance heads believe
£
60%
of businesses note tracking their spend was tough before automation
54%
of professional services companies use a dedicated cloud-based expense management tool – the biggest industry to do so ahead of 46% in retail and 44% in manufacturing
56%
42%
of financial decision makers in SMEs struggle with missing paperwork
of companies used expense management solutions in Q4 2018
1/3
35%
of finance executives whose revenues grew by 5.1% to 10% over a year say automation improves the finance function’s efficiency
of employee expenses are automated, making it the least automated part of businesses
86%
of invoices come in the form of paper or email
9%
of businesses can access real-time data for financial analysis and planning
THE MONEY MAKER | SAP CONCUR
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FAQS
On everybody’s lips Although financial loads can be easily automated, understanding how it works isn’t always simple – but these FAQs make it crystal clear
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hat tangible results will financial automation actually bring my business? Without a doubt, cashflow is the most important thing on most SMEs’ minds. So in that respect, one of the biggest benefits financial automation brings is ensuring companies keep cash on hand and that it’s utilised in the best possible way. With this in mind, the first thing any financial consultant looks for in a business is paper. This is the first indication there are areas of opportunity to help erase age-old inefficiencies and expensive waste. From here, giving time back by removing steps in manual processes is a good start to getting pounds back in a company’s coffers. What’s the most common challenge companies experience with manual expense and invoice management? There are quite a few challenges. One is simple: financial visibility. Without this, SMEs are increasingly exposed to risk 10
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and compliance issues that can hinder growth and long-term goals. SMEs that haven’t implemented the right tools are particularly vulnerable to fraud, fines and penalties. In a fast-changing business environment, effective spend management tools can greatly enhance cash flow visibility and protect against significant losses due to fraud and misspending. Do I need much technical know-how to start automating finances? On the contrary, businesses that aren’t the most tech-savvy can benefit a lot from financial automation. After all, with a small digital footprint it’s a given that areas of your business will already be suffering from inefficiencies that modern tech can remedy. So with a 21st century AI to automate expense and invoice processing, it’s likely many efficiencies will be unearthed from the get-go.
FAQS
Why is now the right time to use AI with my business’ finances? The role of a finance manager is no longer about chasing and approving expenses or acting as a gatekeeper but ensuring a culture of compliance and providing real-time analyses to business leaders. With automated finances, managers today are able to approve expense reports on the go, having already been through the necessary approval processes. Therefore they’re free to focus on bigger issues, such as supporting business growth initiatives. An SME must keep up with this evolution in order to achieve the productivity levels required to get and stay ahead of the competition. Why should I prioritise expense automation? The day-to-day stuff is where small businesses really feel the grind. Take general receipts from employees covering lunch, travel and petrol expenses. Typically, the majority of these come in paper form and end up stuffed in an accountant’s filing cabinet ready for them to manually sift through at month end. But deep-learning AI can use a process called optical character recognition – which derives crucial letters and figures from pictures – and match receipts to vendors, currency and so on in less than a tenth of a second. Given the government’s Making Tax Digital programme is ensuring businesses digitise all their VAT returns, having this kind of tech in your backpocket is invaluable. What is the relevance of Making Tax Digital to my business and how can automated spend help? Government legislation is forcing businesses to turn their tax returns paperless, which has many shaking in their boots about where to start. However, one of the best ways to make HMRC’s – and your – life easier is simply ensuring there’s a clear digital trail to substantiate all employee expense claims. Although it’s made of complex stuff, AI is built to deliver simplicity. When expenses are captured electronically they’re far more searchable, so HMRC doesn’t have to trawl through endless
scraps of paper to make head or tail of it. Streamlining this process sooner rather than later can save you hassle further down the line. How can machine learning and AI help my business? As a business owner, when thinking about what machine learning and AI can do, you should be most excited by the opportunity to really transform and, to some extent, get rid of many of your laborious processes. For example, there’s really no reason employees should need to create expense reports or for managers to review them in this day and age. Their precious time should instead be reserved for things they need to be alerted to that might be wrong. And while a travel manager or finance professional can also get jazzed about machine learning because it makes employees more efficient, it can also significantly improve their ability to understand the success of their programme and ensure they have compliance with policies across the organisation. THE MONEY MAKER | SAP CONCUR
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