2015 Will be the Year of Financial Metadata
There has been a steady shift to a data-driven approach to running a business and in 2015, there will be an increase in the demand from departments across the company for granular financial metadata. The rapid adoption of cloud accounting software has started to facilitate the availability of information in a usable format, however, the demand for data will surpass the standard metrics that are currently collected and will delve deeper into the details of a company’s cash flow to extract more meaningful insights.
Business expenses have the potential to provide a wealth of metadata currently missing because they touch every department and are the true representation of day-to-day operations.
Interesting uses for expense metadata:
Developing more specific department budgets by category and keywords based on last year’s spend
Understanding true customer acquisition costs by associating expenses with specific business prospects
Calculating a more accurate picture of ROI for marketing programs, such as events, by including all expenses in the total spend
Reliance on employee information and manual data entry into accounting software makes business expense data one of the least accurate areas of a company’s finances. In order to get insights like the ones above, the process for capturing the data needs to be more intuitive and automated.
“Filing an expense report is painful. Employees tend to hold onto receipts and wait weeks to submit expenses, managers get incomplete or inaccurate data, and accountants have to put in a lot of manual effort to understand what’s going on.” says Dev Anand, head of business operations for Abacus. “We believe that by improving the experience of submitting expenses and automating the process, not only can the data be improved, but it can be pulled together in much more meaningful ways.”
An expense management solution can make the entire process of managing business expenses more accurate and easier for both employees and accounting. Expense data can be entered as it occurs, cutting down the tedious process and resulting in more details provided. Expense policies can be automatically enforced, requiring receipts, categories and descriptions before they can be submitted for review. Additional data can be collected such as geo-location, client or attendee information and automatically synced to your accounting software.
As your data becomes more accessible, you’ll be able to get more actionable reports based on the additional details and data consistency. As this transition towards increased visibility into company spend continues, we expect the role of finance and accounting teams to shift from that of data entry and organization to strategic insight and analysis.