Expense Cos. Image Receipts
The time-consuming and paper-laden process of managing receipts has spurred corporate interest in imaging products that automate receipt management methods.
Expense management providers Concur, Extensity and Necho Systems last year began offering new imaging solutions, wherein receipts can be submitted digitally, stored and later retrieved.
Concur Technologies last month announced that 10 new customers had signed up for its imaging solution, including BDO Seidman LLP, Hitachi Global Storage Technologies and Progress Energy.
Concur in May 2002 was among the first to release a receipt imaging software solution integrated with its expense management tool. The homegrown service allows Concur users to fax receipts and invoices to a designated telephone number so an image of the receipt can be stored digitally, archived and linked with the appropriate expense report. Expense report approvers then immediately can view receipts and invoices to check compliance.
The solution costs $7,500 for the initial setup, with monthly payments based on the amount of imaging transactions. "In the next few years, you're going to see a strong adoption of imaging," said Steve Singh, chairman and CEO of Redmond, Wash.-based Concur. "It's a sleeper solution for us."
Competitor Extensity in October 2002 announced integration with ImageTag's KwikTag product, an imaging solution that, like Concur's product, lets travelers fax receipts for digital submission, storage and archiving. A month later, Toronto-based Necho Systems followed suit by also outsourcing the imaging solution to ImageTag.
David Guilbault, ImageTag director of product marketing in Chandler, Ariz., said his company's imaging solution could save companies up to $10 per expense report.
Both Emeryville, Calif.-based Extensity and Necho said they have signed a handful of clients to their imaging solutions. Necho revealed the signing of Westborough, Mass.-based Arch Wireless Inc., which is implementing the imaging system into its expense management process.
Expense report approvers at Arch Wireless currently accept reports without hard copies of receipts, which typically are not submitted until a month later. After submission, receipts are filed in accounts payable or shipped to a storage facility.
"You can look at industry studies that say it costs $36 to process an expense report, but to the finance guy, that is a tough sell," said Steven Albanese, Arch Wireless director of financial system operations. "Using imaging was more an issue of ensuring that people are more compliant with how they submit expense reports. Also, we're moving away from paper as much as possible and imaging streamlines the process."
According to Internal Revenue Service auditing procedures, records of travel expenses, expense reports and charge card statements must be archived for a minimum of three years after the tax return filing date. Some states mandate that companies keep these records for up to six years following the filing. In response to marketplace confusion as to what was acceptable, the IRS three years ago updated its receipt management guidelines and clarified that companies can use electronic or imaged receipts in place of paper.
While technological strides in the industry have automated much of the T&E expense management process, the vast majority of companies that have automated expense management systems still are using paper-based methods for receipt collection, storage and archiving. Despite the latency of receipt management automation, a recent report by Aberdeen Group, a Boston-based research firm whose clients include Ariba, Concur, Gelco and Necho, forecast that this year more companies will begin to adopt automated receipt collection methods.
"This is unique in that it really enables a remote field office to automatically manage these receipts," said Elizabeth Ireland, Extensity senior vice president of marketing. "All the way through the process, the people that are in charge of auditing expense reports and checking to see if all the receipts are in can now do this by sitting at a screen instead of ripping open envelopes."
Vendors and proponents of automated receipt management said imaging solutions offer value in several ways, including: eliminating overnight shipping costs of paper receipts, cutting down on paper storage fees, as well as reducing the time associated with internal audits and IRS audits.
New York-based consultant David Hillman said that in terms of receipt storage and archiving, imaging receipts is most useful with hotel expenses since the IRS does not require a receipt when T&E purchases are under $75. However, some companies have a lower threshold for when a receipt must be documented. "With purchasing cards, you need to retain all your receipts should you have a tax audit," Hillman added.
While Concur, Extensity and Necho continue to push their receipt imaging solutions, Gelco Information Network has been offering customers a receipt management and auditing service for several years.
"Our receipt management solution is often overlooked as a part of the expense reporting process," said David Rotman, Gelco vice president of product management. "We see a lot of companies doing it internally and they're missing a lot of opportunities, given the current market."
Reader's Digest has been using Gelco's offering for several years. Payroll manager Theresa Jawaroski sends Reader's Digest's original receipts to Gelco, where they are audited and backed up on disc.
"Right now, we have the hard copies coming back to us, and we send them to storage," Jawaroski said. "In a year or two, we're going to do away with that and just keep the CDs we get from Gelco."