“A lack of visibility is forcing SMEs to regularly go back and interrogate audit trails which is a drag on the business’ resources, efficiency and productivity,” says Kyle Ferguson, CEO of Fraedom, a supplier of corporate expense management solutions, in a Treasury Today article.
57 percent spend hours
His company recently sponsored a survey to measure how much time the finance departments of small and medium-sized enterprises in the UK spend on compensating for the lack of visibility over their business spend.
Perhaps not too surprisingly, the survey result makes a case for the type of solutions which Fraedom provides. SMEs typically lack system tools which are common to large enterprises.
In 57 percent of the responding sample firms, the lacking transparence leads to more than two work hours a month spent on expense or financial management tasks. Over half of respondents found it difficult to access funding.
Banks could help
All this said, there is hope on the horizon. Banks are beginning to invest in new technology meant to help their clients. Another supporting trend is that of open banking.
Card payments is a concrete example. Real-time mobile alerts could be delivered when a card is used. The user could then categorise that spend on the go, and add a receipt. Paradoxically, such basic expense management functionality has so far been more common for individuals than businesses.
“SMEs nowadays have high expectations of their banks,” says Kyle Ferguson.
“One area that stands out is the growing emphasis among banks on the provision of technology-driven solutions to deliver greater visibility and control of spend with, importantly, mobility in mind.”