“Half the money I spend on advertising is wasted,” the Philadelphia department store mogul John Wanamaker famously said, “the trouble is I don’t know which half.” Were he alive today, Wanamaker might be similarly mystified by Big Data, which offers all kinds of opportunities to improve accounting processes such as T&E expenses, but no guidance as to what data is necessary and what’s just wasted.
Data is the fuel for robotics, or process automation, or workforce virtualization – whatever label is used. With data, organizations can employ software to complete high-volume, low-value-added tasks in a way that is both highly standardized and highly scalable. Big data, of course, refers to the extremely large data sets that can be analyzed to reveal patterns and trends especially as they relate to human behavior.
Data analytics, the pursuit of productivity and financial gains using Big Data, has had a positive impact on the businesses of nearly two-thirds of senior leaders who responded to a survey last year. And accountants have an advantage here. They know that better data means more accurate and detailed forecasting, improved financial reporting, enhanced risk management and increased ability to identify fraud.
Implications for T&E Expenses
Typical organizations lose 5 percent of revenues each year to fraud, and misappropriations account for 85 percent of all frauds. Frauds related to expense reimbursements have been found to be an issue at 13 percent of large companies and 17 percent of smaller ones. This increased threat is connected to the more limited financial resources available and lack of internal controls common at smaller organizations.
Big Data has the potential to level the playing field here in that it can demonstrate to the smaller organizations where inappropriate, inaccurate or incomplete claims are being made by employees and where accounting personnel may not be responding in the ways that best serve the business.
Making Expense Reimbursement Work
What data do finance and accounting departments need most to properly reimburse employees for their allowed expenses while protecting the organization against fraud? They need to depend on facts rather than employee claims. They need to know when they are reimbursing for mileage that the destinations and the distances between them are real and not just estimates based on a salesman’s odometer.
SureMileage, from Company Mileage, supplies this data to organizations because it requires it from employees. They report their starting points and destinations and the system calculates the driving distance between them. So, rather than verifying the miles driven, SureMileage calculates the expenses to be reimbursed. Once travel data goes into SureMileage, it becomes an expense reimbursement solution in which supervisors can review and approve expenses and send them to Accounting for reimbursement.
SureMileage not only leverages the power of data to automate processes, it makes clear exactly what data is required to make that automation most effective. Its ability to improve visibility into T&E expenses means that the process improvement continues.
This way, nothing is wasted.