We are often asked questions along the lines of, "how expensive is Acubiz?" or "isn't it expensive to acquire a system for handling our expenses?". Let us try to reverse the question by asking, "do you know how much you spend on handling expenses?"
Especially if the handling of the expenses takes place manually, and as the title suggests, this blog post is aimed at precisely those companies. Unfortunately, a surprising number of companies still use manual workflows for just that.
TL;DRA 2024 Findity report indicates that only 23% of Danish companies used an expense management system in 2023, with 61% still handling expenses manually. According to the Global Business Travel Association, a single travel settlement takes approximately 20 minutes to complete, and 19% of them contain errors requiring an additional 18 minutes to correct, making manual expense handling a measurable and preventable cost.
Our Swedish colleagues at Findity have developed a report in 2024, which shows that only 23% of Danish companies in 2023 were using an expense management system. The number might be even lower. Our research indicates that 61% are still handling expenses manually.
Regardless of the exact figure, it seems reasonable to conclude that many companies still manage expenses manually today.
When we talk manual handling of expenses, it is inevitable not to mention “travel settlement” in the same sentence. That is hereby done.
Most of the companies that handle expenses manually make use of the classic travel settlement. The workflow with travel settlements is as follows: you collect costs and receipts related to a given activity. Next, the travel invoice is handed in, hand-carried to a manager for approval, and finally, it gets carried to the finance department, which enters it into the financial system.
You might be thinking that it sounds complicated. It is. It is difficult and time-consuming for the employee, the approver, and the finance department. In addition to being difficult, it is also expensive.
Managing expenses manually is expensive for two reasons:
The old saying, “time is money,” still holds true. Also, when the conversation falls on travel settlements, according to The Global Business Travel Association, it takes approx. 20 minutes to complete a travel settlement. We think that fits very well. An employee and financial officer will always be involved, while an approver often is. Assuming all these people have an hourly wage, one-fifth of that hourly wage can be considered a cost of handling the expense.
There is also the possibility of errors occurring. The same report concludes that one out of five (19%) travel settlements include errors (missing information, incorrect entry, unclear attachments, etc.). It costs additional money and 18 minutes of extra time.
The cost associated with travel settlements varies depending on who you ask. Finding one figure that can be considered the average cost is impossible. Various reports around the internet write anywhere from $16 to $58.
An old but often-cited 2011 report by the Aberdeen Group estimates the cost associated with handling a travel settlement at $29.38, while The Global Business Travel Association estimates the cost at $58.
What is right and what is wrong? We don’t have numbers on that ourselves. We think it is most fair to proceed conservatively. Therefore, we use $30 as a benchmark in our calculations – a figure which we also believe is very realistic.
The formula for calculating the cost is simple:
The cost of the travel settlement
x
number of employees
x
the employee’s number of average travel settlements per month
As mentioned, we use $30, assuming each employee has an average of one and a half travel expenses per month. For the sake of simplicity, we have prepared examples with 10, 50, and 100 employees (who all make travel settlements).
In the calculation examples, the time used for error correction is omitted.
A company with 10 employees spends $450 per month handling travel expenses. In the Danish kroner, this is DKK 3,140 per month and DKK 37,680 per year.
A company with 50 employees spends $2,250 per month handling travel expenses. In the Danish kroner, this is DKK 15,700 per month and DKK 188,000 per year.
You don’t have to be a mathematics professor to calculate that the company with 100 employees pays twice as much as the company with 50 employees. That is DKK 31,400 per month and DKK 376,000 per year.
In addition to the obvious high financial costs, several hidden costs and disadvantages also follow from manual handling of expenses.
The solution is to find a system that can digitize and automate the entire process from start to finish. We can do that at Visma Acubiz. And we have been doing that since 1997.
We can understand that travel settlements make sense if you, as a company, do not have a system to handle expenses. In this way, all the attachments are “collected.” With Acubiz, we recommend working with our “Fast Track” concept, which involves the user processing and finalizing the expense as soon as it occurs. Then the expense is settled immediately, and it does not, for example, become overwhelming for the finance department at the end of the month when they have to handle all travel settlements simultaneously.
Let’s compare the figures from the calculation examples with some of our own customers. It can be concluded that there is a significant amount of money to be saved by acquiring a digital and automated solution for expense management.
In most cases, you can save 66% or even more by saying goodbye to manual workflows.
Then there is nothing left but to say: get started!
Frequently Asked Questions
How long does it take to complete a manual travel settlement?
According to the Global Business Travel Association, it takes approximately 20 minutes to complete a single travel settlement manually. This involves the employee, the approver, and a finance team member, each spending a portion of that time. On top of this, 19% of settlements contain errors such as missing information or incorrect entries, each requiring an additional 18 minutes to correct.
What percentage of Danish companies are still handling expenses manually?
A 2024 Findity report found that only 23% of Danish companies used an expense management system in 2023. Acubiz's own research suggests the figure may be lower, with approximately 61% of companies still managing expenses through manual workflows. This means the majority of Danish businesses are absorbing preventable processing costs every time an employee submits an expense.
What does manual expense handling actually cost a company per report?
The cost depends on the hourly wages of the people involved. With an employee, an approver, and a finance team member each spending a share of 20 minutes per settlement, one-fifth of each person's hourly wage is a direct processing cost. Add error correction costs at 18 minutes per affected report, and the total cost per report in a medium-sized organization can easily reach several hundred Danish kroner.
What is the typical manual expense workflow that companies should replace?
The classic workflow is: the employee collects receipts and completes a travel settlement form, physically hands it to a manager for approval, and the approved form is carried to the finance department for manual entry into the accounting system. Each physical handover introduces delay, each manual entry introduces error risk, and none of the steps add analytical value compared to a digital, automated alternative.
Acubiz streamlines expense management by automating the journey from transaction to bookkeeping...
Want to know more about why you should automate your invoice processing? Read on here.
TL;DR...
