A Quarter of Brazilian Companies Have No Expense Control Policy and Half Still Use Paper Forms

• The Study on Corporate Expense Management Platforms was prepared by consulting firm IDC in partnership with Clara;
• The survey indicates that 26.7% of Brazilian companies have no expense management policy at all;
• About 46% still use paper forms to control corporate expenses, the research states

São Paulo, Brazil, May 31, 2023 - About a quarter of Brazilian companies (26.7%) do not adopt any policy for managing corporate and administrative expenses incurred by employees. Among small companies with up to 99 employees, 42% do not maintain specific rules to control this type of expense. The results come from the "Study on Corporate Expense Management Platforms," conducted by consulting firm IDC for Clara, a Latin American company offering corporate expense management solutions.

At the other end, 64% of large companies (more than 500 employees) have updated corporate expense management policies. Overall, 51.3% of companies have only a simple account approval process, with review by few people.

To prepare the study, IDC surveyed the market to understand the decision process and companies' perspectives on hiring Corporate Expense Management solutions, their preferences and motivations. About 150 executives from small, medium and large companies were interviewed. The profile surveyed considered executives with influence or decision-making power in hiring the solutions studied.

“Many companies believe that controlling corporate expenses requires many resources. Our mission is to demonstrate that it is possible not only to perform this task for free but also to save money by keeping information organized,” says Rodrigo Aparicio, Chief Financial Officer of Clara.

The research also found that paper forms are still used by 46% of Brazilian companies to control corporate and administrative expenses. Spreadsheets and simple electronic forms are tools used by 78% of companies. About half (48.7%) already use some digital platform, although still with manual inputs. Most companies use more than one of these types of precarious controls.

“The conclusion we reached from this data is that the Brazilian market has not yet matured for the digital world in the day-to-day control of expenses. The path of digitalization is inevitable and so is the automation of information entry, because this combination simplifies work, increases reliability and almost completely reduces errors and fraud,” evaluated Aparicio.

The good news is that 7 out of 10 of these companies intend to reduce or eliminate the use of paper forms. 26% intend to do so in the next 12 months and 43% already have actions underway.

The study also pointed out that larger companies with more complex expense control policies are the ones that make the most use of digital platforms that capture transactions automatically, as well as those that capture movements automatically and in real time. Of all companies with expense control policies, 32% use automated digital platforms and 24.7% use real-time ones.

Also according to the survey, only 7.3% of Brazilian companies use some free solution to control corporate and administrative expenses. Another 82.3% of companies have expenses that can exceed R$100,000 per year (10.4% did not answer).

In the average of the sample of 150 companies surveyed, annual spending ranges from R$31,000 to R$35,000 per year. Small companies spend between R$14,000 and R$16,000, on average, per year to control corporate and administrative expenses. Large companies spend, on average, from R$55,000 to R$65,000 per year on the same task.

“The cost of expense control can reach 1%, sometimes 2% of a small company's annual revenue. If they could do this control for free, they would instantly increase their profit margin. If we consider that well-done control helps find excessive, poorly executed and inefficient expenses, the potential to increase profit is even greater,” concludes the CFO.

Clara's corporate expense management platform allows finance and accounting teams to save up to a year in executing time-consuming processes that are usually performed manually.

Focused on the Brazilian market, Clara plans to invest more than R$100 million in local operations by the end of 2023, expanding its portfolio to 5,000 customers. Just over a year after its launch in Brazil, Clara's credit cards have already moved more than R$500 million, a value the company estimates will quadruple by the end of this year.