Taking the Expense out of Expenses

March 1, 2004

The majority of law firms throughout the UK regard expenses as high on their list of financial priorities. When it comes to recharging business expenses it is imperative that they are processed efficiently and that the client is presented with accurate charges as soon as possible.

However, it seems that a high proportion of solicitors still rely on out-dated paper-based or semi-automated systems to process their expenses. Following a client meeting, a solicitor has to spend time filling out a paper expense form which is then manually submitted to his or her manager for approval and finally sent to the accounts department to be processed and invoiced to clients where applicable. Any queries on expenses by the manager or accounts department will trigger another round in the process as the claim will need to go back to the solicitor for explanation.

The main problem with paper-based systems is that they rely on arduous manual processing. Such a process is time-consuming and inevitably open to the risk of human error, which can make expense claims inaccurate. This is bad for clients and the firm.

According to recent research carried out by the Aberdeen Group, the average time it takes to process an expense claim using a non-automated system, from submission through to reimbursement, is 14 days. They discovered that implementing an automated system could reduce the overall process to just three days.

The research also revealed that expense report processing times could be reduced from 35 minutes to 18 minutes with an automated system, which in terms of employee hours per month, is a reduction from 265 to 187 hours – a total saving of 78 employee hours per month.

Processing claims as quickly as possible is a necessity in the legal profession in a firm of 100 plus partners. If a partner is taking 30 minutes to file an expense report when he or she could be spending that time on billable client work, this translates as a serious loss of revenue.

At CMS Cameron McKenna we recently deployed Concur Expense, a Web-based expense management solution, for its 1,200 UK employees. The decision to streamline the expense management process at here came about as a result of a focus on cost control. The firm is continually looking at ways to increase efficiency by doing things better, faster and smarter. One of the most significant benefits of this Web-based solution for the legal sector is the ability to link nominal ledger codes to expenses, automatically mapping each expense line to the appropriate code and eliminating the need to search manually for the right code. This speeds up the claim processing time so that all expenses can be recharged easily, accurately and quickly.

Any worthwhile expense management system will have an ‘administration assistant’ feature which allows employees to nominate someone else to administer their expenses. Fee-earners, who need to utilise their time as efficiently as possible, can pass the claims process on to an administrator. With an automated system in place one person can file expenses for all the partners quickly – with a paper-based system this could take days.

Aside from all the time-saving advantages of automated expense management, there are also significant cost savings to be made. The system allows users to track, capture, and analyse expenditure information within the firm, generating detailed information regarding how and where the company is spending money on business travel. This business intelligence can be invaluable when it comes to negotiating deals with vendors and ensuring employees are getting the rates agreed with various vendors. For example, in a law firm is it not uncommon for a large amount of travel to be to a small amount of cities. The provision of better business intelligence allows the firm to negotiate better rates with the airlines and hotels that are frequently used.

A recent survey by Business Travel News (2003) of companies with a T&E solution found that after Concur Expense (63%) companies were most likely to be using SAP (9%) and IBM (8%). Automating travel and entertainment expenses can provide legal firms with an increased Return on Investment, business intelligence, faster process and re-imbursement times, reduced operational costs and online anytime access.