Here’s a question — did you know that your company’s receipts are more than just slips of paper waiting to be filed away? They are actually a treasure trove of data that can give you important insights into your company’s expenditure patterns.
This is key because by analysing receipts over a period of time, you can uncover trends, spot opportunities, and be more prudent with expense policies to help your company improve bottom lines.
The benefits of analysing your receipts to uncover data
If you haven’t already started analysing receipts, here are the benefits you can gain from doing so.
Optimised GST claims
In Singapore, GST-registered companies are eligible to claim GST Input Tax on business expenses if certain conditions are fulfilled. In this case, an automated solution could help companies seamlessly collate and document expenses that are eligible for tax claims.
This means easily booking and archiving receipts correctly to have access to them anytime, and making claims that would otherwise be missed.
More effective compliance tracking and auditing
Analysing receipts helps you spot trends and patterns to identify areas where businesses can save cost.
For example, you can start by looking at all the receipts related to business travel in the past year. First, identify the average spend for each trip, traveller, and type of expense, such as transportation or dining out with potential clients.
This type of analysis can also help with compliance monitoring and financial auditing.
Taking the business travel example, you may notice that transportation spending for a certain business traveller is consistently higher than average. This points you to an issue that you need to look into.
You may find that traveller is often sent to cities where transportation options are limited and very expensive. If that’s the case, you may need to assess whether other options, such as renting a car, could be more cost-effective.
You might also find that the business traveller is overstepping your corporate travel policy by not using public transportation.
However, that’s only because the company tends to book cheaper hotels that are far from the business district, where public transportation is hard to come by.
This may prompt you to expand your travel policy to consider possibly cost-effective options like Airbnb that can be found within the business district.
On the other hand, the traveller may have unusually high transportation expenses simply because they meet with more potential clients during a trip than other travellers do. If that traveller tends to bring in a higher number of leads and sales, they can justify the transportation costs.
While historical data provides a macro view, you can also analyse receipts monthly and quarterly. This helps to audit your company’s expenses and spot questionable spending sooner. You can also spot discrepancies by comparing reported expenses to the receipts you have.
Analyse receipts to uncover data
Despite the benefits of analysing your receipts, you might find the task of digging into their receipt data daunting, time-consuming, and expensive.
After all, research has shown that the amount of time spent on manually researching, collating, processing, and analysing data can take a toll on businesses. These tasks can take up an average of 19 working days a year per employee.
Data has shown, though, that using automation apps reduces the amount of time spent on routine jobs. For example, Xero, a maker of accounting software, found that accounting firms that adopt automation saved around 215 hours serving clients annually.
So let’s see why it’s important to put in place a digital strategy for extracting insights from your receipts.
1. Digitise and automate expense management
Research shows that Singaporeans spend around 380 hours a year on administrative and repetitive tasks, including collating and recording data and submitting expense reports.
Not only does this expose businesses to inaccuracies and entry duplication, but it also lowers productivity as the staff has less time for their primary tasks.
But when you automate these routine tasks, employees will be able to free up their time to focus on activities that can offer higher value to the company and directly contribute to the bottom line.
One simple but effective solution here is to digitise receipt recording, and to choose tools that help you automate the transfer of receipt data into your expense management and accounting systems.
Software-as-a-Service (SaaS) solutions provide SMEs with affordable tools to automate these processes, as they allow for flexible pricing depending on the number of users and features a business needs.
These tools are important as they save time, eliminate inaccuracies, and improve transparency. They can also increase employee compliance with the expense reporting protocol through user-friendly interfaces and a seamless experience.
To be more specific, an expense management tool allows you to take a picture of a receipt using your mobile phone and upload the photo.
The tool then automatically extracts the data, attributes it to the user who uploaded the photo, and raises the expense report instantly.
2. Implement an employee-friendly expense management protocol
It helps to put in place an expense management protocol that staff can easily adopt. Start by creating a document containing the procedures and policies for submitting, approving, and reimbursing expenses.
Make sure that your expense management protocol provides clear criteria on qualified expense claims. This needs to be based on employees’ experiences and feedback, especially from those who spend more time on the field or on business trips.
Remember that employees are more likely to comply with the criteria if these are proven to be practical and relevant to their experiences.
3. Make sure data analytics and expense management go hand-in-hand
As a bonus, it would be great if your expense management system comes with business intelligence capabilities. If not, you can integrate a data analytics tool with the system. Many cloud-based tools can work seamlessly with software developed by different companies.
Integrating data analytics into your expense management system makes it easier to analyse data.
For instance, a simple click of a button can show you a year’s worth of data or classify receipts by expense categories or employee.
If you’ve integrated your expense management software with other accounting and financial tools, you can even apply data analytics to perform month-on-month or year-on-year comparisons of expenses, sales, and profits.
4. Extract only relevant data
If the data is flawed, your analysis will be, too. So how about setting standards for the type of receipt data you need to capture aside from the amount?
First, you may want to include the date and time of the receipt, any taxes included the vendor’s name and location, and the receipt number.
Secondly, it’s also important to set a deadline for recording receipts, such as within 15 days. This way, you will have up-to-date information.
5. Enjoy seamless usability
Keep in mind that many expense management tools are easy to use and do not require staff training. Thanks to a tool’s intuitive usability, users can enjoy a seamless experience from end to end.
In the SaaS landscape, when users encounter issues, they can simply access the product’s help centre or resources and quickly figure out the answers on their own.
Dig into your receipts data
Your receipts aren’t mere information to be recorded. They come with data that, taken collectively, can give you rich insights to help your business become more efficient. And for what it’s worth, we know that SMEs need to constantly optimise their processes to grow and succeed.
To do that, you don’t need to look far—you can already dig into your receipts data today.