Issue link: https://epubs.iltanet.org/i/30285
ONLINE EXPENSE MANAGEMENT: THE REINVENTION OF A CRITICAL BUSINESS PROCESS ALTERING BEHAVIOR THROUGH GREATER TRANSPARENCY Behavior can be changed effectively when people understand that their actions are being monitored and their decisions are visible. In the same way that awareness of a red-light camera can alter behavior, people will be aware that their spending decisions are visible and understandable. The economic results of this change in spending behavior can be far greater than the efficiency gains of the accounts payable department. One finance director at a 400-plus lawyer firm noted that the entire process has been sped up, and that if they can’t remember the dollar amount limit for meals, the system’s rules will remind them. Further, rules can be established that do not allow certain expenses to be submitted (e.g., business development or recruiting) unless a pre-approval is attached. Just knowing that the expense must be approved in advance will make people think twice about the request, their budget, and keeping the actual expenses in line. In addition, practice group leaders will feel that they have real control, since they are not just approving expenses after the fact. Most firms implement a variety of policies to manage non-billable expenses: travel limited to economy class airfare, a cap on meal expenses when no clients or prospects are present. Knowing that that these policies will be checked and enforced by the system will eliminate misuse and provide a potentially sizeable reduction in expenses. MINIMIZING RISK AND MAXIMIZING COMPLIANCE Failure to comply with government regulations across worldwide jurisdictions is a significant business risk. Yet compliance decisions are often in the hands of the least experienced and lowest compensated employees — often in remote offices with little oversight. By establishing and maintaining rules in a central repository, compliance is ensured even with employee turnover. Many firms have client agreements that specify limitations on which expenses can be billed and how much can be billed: limitations on traveling business class, cost per night of a hotel, meal charges in a lawyer’s home city, etc. Failure to comply with these agreements is embarrassing, damages credibility and often leads to delay in payments or write-offs. With an expense management system, client and matter-specific rules can be established. Lawyers and assistants are warned at time of entry of any potential violations. Online expense management tools are not just the modernization of a critical business process; they present an opportunity to save money by improving productivity, increasing control of billable and non-billable expenses and increasing cash flow while at the same time providing a direct and important benefit to end users. ILTA Pay tream SURVEY REPORT Travel & Expense Management Benchmarking Improving T&E Processes through Automation TEM Survey Featuring Insights on... Changes in T&E Spend Challenges Associated with Manual T&E Processes Expense Submission and Reimbursement Methods Technology Adoption and its Impact Integration of T&E with Corporate Cards Featured TEM Vendors Underwritten in part by: Concur CyberShift Chrome River Q1 www.paystreamadvisors.com 2011 Click here to download the PayStream Advisors report Click here for more on expense management www.iltanet.org Financial Management 29