Managing Non-Payroll Spend Takes AP Teams 17 Hours per Week

Non-payroll spend management is designed to deploy, account for and control the money that companies spend to drive growth, yet this function too often relies on inefficient processes.

Managing non-payroll spending by employees is a labor-intensive — and therefore also expensive — process.

In fact, the typical accounts payable (AP) team allocates 17 hours per week — which is equal to 42% of a full-time employee’s workload — going to this one process.

That total includes nine hours processing employee expense reports and eight hours tracking and collecting receipts, according to “ The Financial Performance Quandary: Leveraging Automation To Better Manage Non-Payroll Spending ,” a PYMNTS and Airbase collaboration based on a survey of 225 executives at software-as-a-service (SaaS) firms.

Ripe for Digital Innovation

The accounting department is ripe for digital innovation, ditching paper in favor of streamlined data flows, Airbase Senior Manager of Accounting Robin Sharma told PYMNTS in an interview posted in July.

Read more: Small Tools Bring Big Payoff as SMBs Clamp Down on Spending

With a glance back at more than a decade in various accounting functions, Sharma told PYMNTS: “I’ve spent countless hours manipulating data, gathering information and putting that into accounting software to analyze it.”

Twenty-two percent of the executives surveyed for the report said manual processing is an issue they face in managing and processing non-payroll spending. That was the second most frequently mentioned problem, behind only a lack of visibility before spending is made.

Large firms — those with between 500 and 1,500 employees — were especially likely to say manual processing is an issue. Twenty-nine percent of such firms said this was a problem, compared to 16% of the firms that have between 100 and 500 employees.

Streamlining Non-Payroll Spend Management

To mitigate this issue, many companies are adopting an automated system with which they can streamline non-payroll spend management and improve financial performance.

“By using software to manage that data and see it all in one place, this saves time,” Sharma said in the interview posted in July.

Indeed, PYMNTS research found that firms with a system that consolidates spend management devote less time to manual tasks than those who do not have such a system. While companies that have a consolidated spend management system spend 13% of their time on manual tasks, those without one spend 24%.

Working More Efficiently

Due to the considerable costs and frictions many are experiencing, SaaS businesses are interested in having one system that would allow them to manage different types of non-payroll spend while enabling AP teams to work more efficiently.

Fifty-five percent of SaaS firms already use such a system. Among the firms that do not, 84% would be at least somewhat interested in using such a system.

Beyond the greater efficiency and the cost savings that comes with a consolidated spend management system, there is a priceless benefit for the financial and accounting professional who is looking to make sense of up-to-the-minute payments related information: That granularity of insight provides a welcome roadmap pointing the way to what comes next, Sharma told PYMNTS.

Centralized platforms, Sharma said, “Allow people to focus on projects [other than closing the books] and can help them work on the big-picture items.”