Fortunately, the latest expense solutions offer new capabilities for managing foreign requirements, providing data visibility and streamlining the reporting process. Along the way, they reduce or eliminate many of the problems that have long plagued travelers.
“An effective global expense management solution is borderless in the sense that it offers the same stellar user experience no matter where you are in the world,” says Matt Allen, who works with strategic partnerships for Expensify. This means it runs in the background while tracking expenditures for hotels, flights, meals and other items regardless of location. Such a solution also flags potential problems including policy violations and duplicate expenses without the need for manual review of receipts.
Another key feature is automation. “A proper expense management solution automates as much of the process as possible, from receipt transcription and credit card import to expense submission and reimbursement,” Allen says. Ideally, this means either a traveler opens an app to take a picture of receipts or receipts are automatically imported, and the rest is taken care of by the system. To be international-friendly, it must also offer support for world currencies, live exchange rates, while supporting a multitude of tax regimes and working in “offline” mode.
Implementing a corporate card program is the key to global expense success for many corporations, notes Anne Becknell, senior vice president of strategic solutions at Chrome River. “Cards offer a more favorable conversion rate, and also eliminate the need for forex rates to be calculated for accurate reimbursement,” Becknell says.
For employees traveling to regions where card theft is more common, using a corporate card also provides peace of mind for travelers who otherwise would need to use their personal cards. Having card transactions flow directly into the expense solution also eliminates some major post-trip irritants.
Becknell adds that for out of pocket-purchases, it’s important to ensure that reimbursement is calculated at prevailing rates to ensure neither the employee nor the company loses out. An expense solution should be able to automatically calculate the exchange rate not just on the day that the expense is created, and should also be able to go back and calculate the rate on the transaction date.
The ability to handle the entire trip in a single report is also desirable, Becknell says. “For employees that may travel to multiple countries on the same trip, having to submit multiple reports for the different currencies is a pain,” she says. “So being able to submit expenses across several countries and currencies in the same report will save a lot of time and hassle for travelers.”
Compliance with local requirements is another important factor. If you have employees who are based in multiple countries around the world, you need to ensure your expense policy is compliant with local laws and regulations, according to Becknell. “These could range from German mandatory per diems for traveling employees, through to requirements for XML receipts in Mexico,” she says. “Finding an expense provider that can guide you through these regulations and incorporate them into your program can be invaluable.”
Greater Demands
Given the opportunity, any traveler will probably complain that life just isn’t simple when dealing with the cost of doing business in other countries. “Global expense management has many complexities above and beyond the traditional domestic expense program,” says Bob Neveu, CEO of Certify.
One consideration is currency conversion, including the actual purchase amount plus any exchange rate fees charged by the merchant, credit card processor and settlement bank. When using a corporate card abroad, it’s important to be able to quickly and easily link such charges to the expense item, because frequently these fees may come through on the credit card statement as multiple charges, according to Neveu.
And when a traveler is using a personal credit card resulting in a reimbursement, it’s important to have an expense management system that will automatically gather these charges and insure full reimbursement for the employee. “Real time currency conversion is critical to keeping the traveler on track and fully reimbursed,” Neveu says.
In terms of the overall management of a global program, Becknell says one of the biggest challenges is regulatory compliance for sales tax and reimbursement rates. She says if your organization confronts VAT, GST, PST, HST, QST or FBT rules as well as other requirements of international taxation, you’ll want your expense management program to have global capabilities to ensure that you’re always in compliance.
A similar level of flexibility is needed with other elements of expense management, according to Becknell. “Will your expense management program incorporate the countless different expense taxation and reporting regulations in every market where you do business, and also keep you informed of upcoming regulatory changes to help you keep compliant?” she asks.
As an example, she notes while US mileage is reimbursed at a flat rate, in some countries it differs based on engine size or the number of the people traveling in the vehicle. “Understanding and keeping track of all of these nuanced regulations for each market can be a major headache,” Becknell says. “This can also lead to business risks if you become non-compliant.”
On the upside, reclaiming foreign VAT can be a surprising source of hidden cash for organizations, according to Hendrik Vordenbaeumen, vice president of product management for SAP Concur. “The reclaim process can be difficult to manage and understand, as the rules for which value added taxes can be reclaimed varies by country,” he says. “An integrated solution simplifies the laborious VAT recovery process, while intelligent knowledge-based automation ensures a maximum foreign VAT refund.”
Last year, his company partnered with EY to deliver a new business travel solution that provides real-time immigration and tax assessments to business travelers. The integrated tool will capture relevant travel and business activity data within SAP Concur, then analyze the data to make a real-time assessment of a business traveler’s tax and immigration obligations before travel begins. It also helps HR and finance departments ensure they stay compliant with country-specific regulations where employees are working, according to Vordenbaeumen.
While it’s hard to argue against the attractiveness of these kinds of features, going global is not without its pitfalls. “One of the biggest challenges in trying to develop a global expense management program is the process of local requirements gathering and buy-in,” says Darrin Grafton, CEO of Serko. “Often there is great disparity between countries and their level of automation.”
He notes that some markets may have well-established local expense systems that cater to their local needs, and moving to a global system creates conflict. At the same time, other markets may be highly manual in nature or have very specific requirements not accounted for in a global system, which creates requirements gaps and training challenges. This can be especially problematic for smaller markets, where there may be difficulties such as prioritizing R&D or addressing configuration challenges.
What To Look
For As corporations evaluate the various global solutions available to their travelers, several considerations rise to the top of the shopping list. For example, Vordenbaeumen says, “Expense solutions that synthesize travel and invoice data are a must. On top of that, integrated platforms equipped with a budget component provide a more comprehensive dashboard for spend, before and after it occurs.” These capabilities empower travel and procurement managers to give their finance leaders, sales leaders and project managers near real-time insight into spending as events unfold, enabling them to take appropriate action to get ahead of overspending.
In addition, effective expense solutions leverage machine learning and automation to spot spend patterns across data, which can help to rein in expense fraud. Vordenbaeumen notes that when technology decision makers implement a solution that comprises all these components, they gain better visibility both globally and in local subsidiaries, as well as higher savings potential.
According to Neveu, direct integration between the travel and expense solution is a critical component. This allows travel charges to flow directly into the expense system, while also including any changes and miscellaneous fees typical to business travel. “It’s also important for the travel manager to quickly review the destinations and locations of their global travelers, allowing the travel manager the ability to provide a higher duty of care,” the Certify CEO advises.
While traveler convenience is highly desirable, robust data for management is also essential. “Ultimately, the procurement manager overseeing the travel and expenses spend portfolio requires detailed visibility into the spend and an element of control from a policy perspective,” Grafton says. He notes that expense management systems provide an additional level of data detail that can’t be found from within the financial systems, and good systems offer an element of reporting that will provide a manager with actionable data to measure the effectiveness of their strategy. As an example, he cites use of preferred suppliers and cases of out-of-policy bookings where these suppliers either weren’t used, or negotiated preferred rates not received.
For travelers and travel managers alike, the continued growth in mobile brings both opportunities and challenges. It’s not surprising, as Becknell points out, that most traveling employees will use a mobile phone at some point in the expense process for tasks such as capturing an image of a receipt or forwarding an e-mail with an airline charge. “It’s critical that an expense solution can be effectively used on any mobile phone or tablet, regardless of its screen size, operating system type or version, and can also be accessed just as easily on a low-bandwidth mobile network as over WiFi,” she says.
Problems can surface, however, when a native mobile app downloaded from an app store is optimized for those using the most recent version of a device and the latest operating system. For those with older or less powerful devices, the user experience could be less than satisfactory. Added to that, native mobile apps are often stripped down in terms of functionality compared to the full version accessed via the web.
“Those in roles and regions where personal computer ownership is low may struggle with the reduced range of capabilities offered by a native app versus a full-function mobile web app.” Becknell says.
On the plus side, mobile apps offer impressive efficiencies. “When users snap photos of their receipts with an app, machine learning algorithms can read receipt text – amount, currency and vendor – and pre-populate expense items accordingly,” Vordenbaeumen notes. When this feature is combined with the regulatory compliance benefits of receipt digitalization, the processes around international business travel can be drastically simplified.
Bot technologies are also streamlining expense reporting. An example is Concur’s expense bot for Slack, which allows employees to submit expenses directly within their current workstream.
Vordenbaeumen concedes that with consumer and supplier apps right at the fingertips of employees, it does open the door more to bookings that may be outside of policy. At the same time, the advantages offered by appropriate technology and an integrated ecosystem providing real-time visibility are significant. The combination allows businesses to stick to budgets, apply policy, and receive corporate discounts, all while still providing international travelers the tools and technology they need.
