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Faulty expense claims costing Australian businesses $100 million annually

Sydney, June 1, 2011 – Australian businesses are losing $100 million annually in rectifying errors in expense claims, according to a new survey from Concur, a leading provider of integrated travel and expense management services. Despite operating in a technologically advanced era, human error is the number one cause for this loss.

Compiled by Galaxy Research*, the independent survey of accounts payable staff in companies with 50 employees or more, found that nearly 70% of Australian businesses are surprisingly still using inefficient manual processes, such as forms and spreadsheets, to process business and travel expense claims. This is leading to as many as two-thirds of Australian businesses reporting errors.

Errors include the absence of a receipt, expenses being allocated to the wrong code and individual expenses not reconciling with the total claim figure. Fixing these errors is costly and labour intensive. On average, accounts payable staff are processing over 200 expense items per month, which is taking almost 1.5 days to complete. This time could be better deployed elsewhere, such as chasing up unpaid invoices.

“Many CEOs would be astonished to discover this financial black hole in their operations. Using the right technology can drive business success, using the wrong technology can equally hinder success, which is why outdated processes are creating an enormous and unnecessary hidden cost for Australian businesses,” said Michael Eberhard, executive vice president and general manager of Concur Asia-Pacific.

In addition to the financial considerations and inconvenience, rectifying errors can also upset the smooth running of accounts payable and cause friction in the office. Almost half (45%) of those that encounter errors regularly report that they cause annoyance between accounts and the claimant.

“The accounts payable team is part of the backbone of any company as we provide the checks and balances to ensure good operation. Just like in other facets of business, technology is becoming more and more prevalent in our processes as it helps eliminate unnecessary error, which in turn leads to a much more harmonious working environment,” said Ramy Zaki, finance manager, CMG.

Automated travel and expense management systems not only allow for much quicker inputting of expenses, which frees up staff time, it also allows for the tracking of expenses in real time, which provides improved visibility into the business. Better recording of expenses is vital, particularly to small business owners who need constant insight into their financial position.

“In an era where technology permeates every facet of business life and with cloud based services making powerful applications available to any business, regardless of size, it is very surprising that archaic practices, such as filling out forms manually, still exist in today’s workplace” concluded Mr Eberhard.

Note to editors.

*The survey was conducted by Galaxy Research during March-April 2011 and included responses from 200 Australians nationally, aged 18 years and over.