3 excellent reasons to benchmark your company spend against industry peers

Our ongoing “Did you know” series highlights the capabilities and benefits of AppZen Expense Audit, bringing you deeper into what makes it tick and how you can take advantage. In this segment, we look at benchmarking as a tool to expand visibility and drive effectiveness within the finance department.

Competition fuels desire and innovation in the business world, and benchmarking allows organizations to gauge how well they perform in that competition. Benchmarking compares a specific organization against both best practices and other, similar organizations. Done well, it can provide data to settle internal debates, identify strengths in a particular product or service offering, or convince the C-suite that a new project is worth a risk. 

We see public benchmarks everywhere: stock markets are benchmarks of company value, the Fast 500 measures corporate growth, and tools like Comparably offer employee-driven benchmarking. But obtaining internal benchmarking data can be challenging. There is a clear need for accurate, on-demand data to compare your organization against others across finance-specific metrics. 

Tools like AppZen Expense Audit can deliver precisely that. Below, we identify three core areas where modern benchmarking provides significant benefits to finance departments.

1. Identified and controlled risk

Expenses that fall outside of company policy, or are potentially incorrect, wasteful, or fraudulent, are high-risk expenses. But most companies only sample 5-10% of expenses for manual finance auditing, so the majority of high-risk expenses remain hidden, making insight nearly impossible.

AppZen audits 100% of expenses and flags those that are high risk, using AI-audited data to automatically feed metrics. Insights like the percentage of high-risk expense lines or the percentage of high-risk spend, overall, are possible for the first time. And it doesn’t stop there.

Knowing the high-risk spending levels within your organization is valuable. But benchmarking these levels against your industry peers provides even more valuable insight. Knowing that your organization is dealing with excessive levels of high-risk spend while your peers are not is an excellent motivator for the team to reduce these numbers, perhaps by identifying those employees with the largest number of Missing Receipt Affidavits or high-risk reports, for example. Benchmarking provides insight and incentive to tackle the most pertinent, spend-related problems at their roots.

Because AppZen works with over 1,000 enterprises across all major industries, it’s possible, for the first time ever, to gain a clear picture of your risk level, relative to others.

2. Enhanced visibility

Modern CFOs are being asked to do more and more, extending their responsibility, skills, and scope to morph into mini-CEOs. As a result, finance teams require new success measures that better incorporate future value and encompass more expansive business knowledge and insights. 

AppZen Expense Audit tracks across many metrics to help identify areas where you can improve your expense and audit programs. Areas we evaluate include:

• % Receipts resubmitted
• % Spend resubmitted
• % High-risk lines
• % High-risk spend
• % Touchless reports
• % Out-of-pocket
• % Personal expenses
• Average expense age (days)
• Monthly audit action taken per FTE (full-time employee)

Benchmarking to this level of detail offers a way to provide quantified data on traditional spend metrics and broader business value measures. This clarity allows finance teams and their business peers’ metrics to be more closely aligned and enhances the CFO role as a business collaborator.

3. Automated process efficiencies

A core benchmark of whether an expense automation solution delivers a return on investment (ROI) is the percentage of expense claims processed without needing human intervention. 

Using an AI-powered solution such as AppZen Expense Audit helps increase the volume of touchless claims. This, in turn, drives productivity, effectiveness, and faster reimbursement for employees. As the Mastermind AI that powers Expense Audit sees more examples of how humans deal with expense exceptions, it learns, adapts, and transforms to handle those exceptions even more efficiently in the future, delivering stronger and stronger metrics. 

The ability to benchmark these core metrics versus industry peers provides an even wider scope and value. Monitoring the success of your program against the industry can identify areas to improve your expense program and audit where necessary. And if your program is excelling, it can deliver concrete validation of exactly how successful those activities have been.

Summary 

As finance teams embrace new technology such as AI-based benchmarking, they become empowered to forecast and compare ever wider business outcomes: how customers pay, which products will succeed or fail, how competitors will react to pricing changes, and where risks will emerge in the future. Comparing your company’s spend management to that of your peers may seem like a trivial exercise, but it is far from it.

AppZen Expense Audit provides model-based benchmarking that can transform the CFO and the finance team, placing both at the center of enterprise positioning, decision making, and strategy. The CFO who seizes the opportunity of new technology can transform the finance engine, their career, and the whole enterprise. All because of something as simple as benchmarking.

Wondering what else AppZen Expense Audit can do? Check out the rest of our “Did You Know” series or check out AppZen Expense Audit on the web, or reach out!