Administrative tasks, especially those with a compliance-related element, can be a significant yet unquantified cost burden for companies.
In order to adhere to the multitude of regulations and restrictions in place today, you require dedicated and professional staff, as well as robust processes, technology and tools to mitigate the risks associated with non-compliance. Usually, there is a necessity to allocate significant funds for potential legal costs, especially in cases of penalties for non-compliance.
Many companies remain skeptical as to the benefits of investing in compliance, believing it to be an expenditure they can avoid, or at least reduce, by adopting ‘basic’ compliance measures. According to a recent Ponemon Institute study, the average cost of non-compliance is four times the cost of being compliant.
The cost of processing a single invoice can also be surprising. It varies from company to company however, given that it largely remains a manual process, it impedes considerably on the efficiency of your operations. When you add up the hours you spend on administration, rather than on profit-driving activities, you will start to appreciate the actual cost this represents, most of which is consumed by labor-related costs.
For smaller businesses, outsourcing can be more cost-effective than employing another full-time employee. For larger companies, outsourcing can provide a systematic control process, scale advantages (such as volume discounts) and widespread knowledge. Administrative tasks inherently take businesses away from their core work and can impede growth. Therefore, an increasing number of organizations are realizing the cost savings and process improvements that come with outsourcing both of these elements.
DA-Desk have been tackling the administrative burden for over 16 years, giving companies more time and resources with which to drive their business growth. We have also invested heavily in compliance tools, sanctions screening software and in building the processes and technology around these. Also, as we stress to our customers, through checking every single invoice for its legitimacy and basis of calculation, we are performing the most basic and repetitive compliance check.
Surprisingly, the actual number of errors found in the invoices has not improved significantly over the past 16 years, and the credit notes received through our systematic checks amounts to over USD 30 MILLION per annum. With our robust and stress-tested bank account verification process in place, it also means we are stopping all phishing and whaling attempts on an alarmingly frequent basis. Currently we are stopping at least one attempt to defraud our customers every week.
We know exactly how much administration and compliance can cost - we employ people and invest in training and technology to perform these functions so our customers can concentrate on their core business.
By Mark Franklin, Operations Director, DA-Desk