When field-based workers like truck drivers or cleaning service contractors encounter work-related expenses on the job, they might reconsider the purchase if they think there will be a delay in getting reimbursed. This could also result in delays for customers and negatively impact a company’s bottom line, which is why new expense management solutions are emerging at a rapid pace.
Fleet-oriented solutions can help firms track and manage their vehicles, fuel-based spending and other costs, and some predict that the market for such solutions will reach $43.5 billion by 2024. Similarly, the SaaS-based expense management market will register a CAGR of 8 percent between 2018 to 2025, with the global market size reaching $43.5 billion by 2024.
The new Workflow Spend Playbook highlights the latest solutions, including automation and artificial intelligence (AI), that are helping SMBs keep drivers and workers operating smoothly.
In a recent interview with PYMNTS, Dale See, president of cleaning service Stanley Steemer of Northern California, discussed how the company uses spend management solutions and the peer-to-peer (P2P) service Venmo to quickly reimburse professionals for on-the-job expenses – and why the future lies with AI for automation.
The global smart fleet management industry was valued at $290.9 billion in 2016 and is projected to grow at a rate of 7.6 percent by 2025, presenting new opportunities for fleet management professionals.
Operational expenses associated with day-to-day fleet operations can be multimillion-dollar exposure points for businesses that have large mobile workforces. According to research by spend management firm Oversight Systems, more than 60 percent of finance professionals reported that their companies struggled to identify wasteful spending. Over 40 percent said the same about forecasting employee-initiated expenses.
Every manager needs to consider cargo optimization, route planning, scheduling and dispatch, among other functions. A well-managed fleet can be an asset, and management system software providers’ tools will grow only more sophisticated with time.
Artificial Intelligence for Automating Expenses
Deploying technology – especially AI – can streamline the auditing process and boost cost savings significantly.
As AppZen noted in a recent report, companies that do not use AI audit only 2 to 10 percent of their expense reports and 5 to 10 percent of their invoices. Conversely, firms that leverage AI to dig deeper into their spending trends are able to audit nearly all invoices and expenses. AI can flag 8.7 percent of expenses as high-risk, tied to duplicative or unauthorized spending. Similarly, about 4 percent of invoices are flagged as high risk.
Bigger picture, more than 96 percent of enterprise spend beyond payroll is related to accounts payable; 3.7 percent of the remainder is travel and expense (T&E) related. Among enterprises that used AI to audit spend, 85 percent automatically approved low- and medium-risk invoices and expense reports.
Oversight Systems also found that 90 percent of high-risk spend activity stems from 5 percent of employees. Using AI, organizations can pinpoint the employees that represent the highest risk.
Recent research showed that the leading concern for businesses working to handle spending is poor visibility into expense data, with just 27 percent of companies having systems in place to flag out-of-policy expenditures.
Forty-three percent of organizations are still managing expense reporting manually. Perhaps not surprisingly, small businesses use a manual system to track expenses far more (53 percent) than their enterprise (27 percent) and mid-market (44 percent) counterparts.
When using automated solutions, though, a majority of small businesses (64 percent) realized a positive ROI in one year or less, while 71 percent realized a positive ROI in two years or less.
Stanley Steemer’s See projects that AI solutions could be the company’s biggest technology investment opportunity. Such funding could help the company automate tasks and better communicate responsibilities to its professionals.
“One of our top goals is [getting] AI into our world. I see so many opportunities in this space where AI could help,” he said.
Embracing technological solutions like AI can boost SMBs’ efficiency and help them pull ahead in a crowded market.