Compleat Software Limited http://www.compleatsoftware.com has been looking into the profiles of people within SME organisations that are costing those companies money on a daily basis whilst the management is oblivious to the problem.
Employees of the average SME are costing the organisation money, because they have not been given the tools to operate at maximum efficiency. Compleat Software believes that employees are being tied up in slow manual processes, that result in guessed accruals, going over budget without realising, failing to negotiate the best deals with suppliers and employee expenses systems that costs up to £80 just to process one claim.
In order to best explain the problem, Compleat Software has identified five individual character types and the issues they face on a daily basis. Meet Pete, Margaret, Ethel, Bob and Norman, who might be fictional characters but the likelihood is, you already know them.
1. Pete has piles of paperwork. There are purchase request piles, purchase order piles, delivery note piles, purchase invoice piles and they are spread all over the organisation. To make matters worse, the content of every piece of paper is invisible to all. It is hardly surprising that some get lost, which adds to the problem. The reliance on paper-based systems is making Pete’s job really difficult.
2. Margaret produces the month-end accruals to complete the management accounts and cashflow forecasts. The accruals represent her "best guess" of the purchase invoices and expenditure that failed to be processed in time. The management then make all their business decisions based on Margaret's best guess, already weeks out of date.
Margaret guesses because the manual processes involved in raising orders, processing deliveries and getting the expenditure approved is slow, labour intensive and ineffective. She does the best she can with the tools and processes the organisation provides.
3. Ethel knows everything about her job, but keeping track of every bit of expenditure across her department is one step too far and budget overspend is inevitable.
Ethel blows her budget because the organisation does not provide the systems to help her and expects Ethel (and all other departments) to keep an accurate record of what everyone is spending, moment by moment, instead of focusing on what they are good at.
4. Bob doesn't like to haggle too much over price even though he does shop around. And most organisations have a "Bob" in every department. This results in the organisation spending more than it needs to, whilst managing an ever growing number of suppliers offering similar goods and services.
The reason all the Bob's don't change is that there is no joined up and automated purchasing process, no means of quantifying the saving being produced, no way of enforcing consolidation of suppliers and no means of motivating them to get the very best price they can.
5. Paying employee expenses on time is important, but the process is laborious and tedious for everyone involved. Norman fills out the form, attaches the receipt for his sandwich and sends it to his boss. His boss checks it, signs it and sends it to accounts.
Accounts check it again, make sure Norman's sandwich is an allowable cost, whether it can be recharged to a client (which one, how much and when), codes it up and post it to the ledgers. Some weeks later, Norman gets his expenses paid. Like most of his colleagues, Norman waits until the last moment before submitting expenses but expects them to be paid on time.
Neil Robertson, CEO of Compleat software comments, “You might not recognise these people by name, but I bet a Norman just handed you his expenses, a Margaret the accruals, or an Ethel just realised she’s blown her budget and needs more money to cover the costs.”
Robertson continues, “Companies need to be providing employees with the right tools to do the job and these are in the form of fully automated, paperless, purchasing, spend control and employee expenses solutions. This will give instant visibility of every transaction to everyone that needs it, enabling central control over budgets to stop overspend before it happens and smarter buying power, with spending on common items consolidated company wide.”
Robertson concludes, “In an age of austerity, access to real time information is essential, to control and manage who the company buys from, what they buy, how much they pay and when it is paid. This delivers a hard cash saving that never leaves the bank account and goes straight to the bottom line. As for your employees, automating the purchasing process will make all of their lives easier, increase their productivity and enable them to focus on driving the business forward, instead of playing a never ending game of paper-chase.”
Tags: Employee Expenses, Neil Robertson, Spend Control, Paperless, Compleat Software
Posted: 14/10/2010 12:13:49
by
Neil Robertson, CEO Compleat Software
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