“Expense management tools are catching fire in the back office,” says Victoria Graham, senior director, global commercial solutions for Visa. “The ability to automate accounting and back end processes lead to decreased overhead, which in turn saves costs.”
The cost savings are realized because program administrators find themselves saddled with less manual work and can spend time more efficiently, she says. And with the data made available, managers can delve into data analysis for areas of potential improvement.
“The enhancements that simplify the program administrator’s job are where the company’s bottom line really benefits,” Graham says. “But those objectives will always need to be balanced with the other, sometimes conflicting objective of providing convenience to the employee traveler.”
Richard Crum, senior vice president of T&E global commercial products and solutions for MasterCard, says the convenience angle should not be overlooked. “Filing the expense claim is an administrative task which is generally not enjoyable, so making this process friction free is a key demand from employees,” he says. “Employees want to be able to submit travel and entertainment expenses accurately and quickly with an easy, highly intuitive user interface.”
Advancements in this area are promising, according to Bradley Matthews, head of middle market product and marketing for U.S. Bank’s corporate payments business. “We are almost but not quite there in bringing full transparency for the traveler,” he says. “The expense reporting experience for travelers is becoming more seamless, while matching their consumer experience.”
In fact everyone is heading in the same direction of user-friendliness, he adds. As that starts to happen, the differentiating value moves increasingly to the back end and the infrastructure’s ability to adapt and grow. “How easily can it be integrated with your other systems, and what kind of incremental insights and value can your expense management tool give you?” he asks. “That’s where the new battleground will be.”
The flexibility offered by expense management tools should appeal to both the employee traveler and back office finance/accounting teams, according to Barry Padgett, chief product officer for Concur. “Automated mobile tools enable employees to file their expenses from anywhere,” he says. “And they provide managers the same flexibility for reviewing and approving.”
Padgett cites research from Aberdeen Group showing that automating expenses decreases the cost of expense claim transactions by 75 percent or more, and reduces the time to process expenses by 35 percent. “This time and cost savings helps businesses focus on what matters most – the success of their business,” he says.
Virtual Reality
Graham views the development of travel and expense tools within the context of the move away from physical cards and into the virtual/digital space. As examples, she points to the expanded use of virtual accounts as well as mobile invoice and receipt imaging processes.
“Virtual accounts were previously used primarily for B2B payments, but they have made their way into the day-to-day purchasing, and even T&E in some markets,” she says. Benefits include reducing fraud, allowing tighter controls on purchases, decreasing credit risk and eliminating the cost of printing and mailing cards. Getting a payment tool into the hand of the purchaser much more quickly is also a factor.
“Receipts are starting to go primarily digital and invoices are heading that way, improving the experience for all in the end-to-end expense management chain,” Graham says. She notes that the ability to capture a receipt on a mobile phone makes the expense management process more seamless from a cardholder perspective.
“Travelers no longer have to keep weeks of receipts in their wallet and risk losing them,” she says. “For the program administrator, reconciling, auditing and storing physical receipts is very high maintenance and burdensome, so in going digital the process is greatly simplified.”
At the same time, the mobile capabilities of expense management tools, including receipt imaging and expense report submission, support global business operations, says Guillaume Bouvard, vice president, American Express Global Business Consulting.
“More and more companies are implementing one global expense management tool as opposed to different solutions by region or location,” he says. “A single solution provides global data, streamlines the implementation of a global policy and allows for consistent controls.”
The trend is toward bundling multiple services from multiple vendors into a seamless package for the customer, Bradley says. An overarching goal is to integrate the expense management tool with the payment mechanism and other financial tools in a way that allows easy flow from one to the other. That would mean the card program manager can move between systems without having to log in again and remember yet another password. At the same time, information could be entered once and find its way to the multiple places where it’s needed, he says. “As providers, we want to get to a point to where everything is integrated, bundled and packaged together,” Bradley says.
A major plus is the capability for getting enhanced data through corporate card programs to automatically populate the expense claim, according to Crum. “Requests for mobile receipts and receipt data capture via optical character recognition have become increasingly common,” he says. He adds that some expense providers are taking all the data automatically from receipts and card feeds and creating an auto expense function. This automatically builds the expense claim and lets the employee simply review it for exceptions.
Make a List, Check it Twice
When it comes to adopting T&E tools, what features are most important?
“First and foremost is that everything needs to be accessible from everywhere,” Matthews says. He reiterates that travelers don’t want to wait till they get back to the hotel to record their spending or their travel booking. They prefer instead to do it in real time while incurring the expense. “Providing that anywhere-anytime capability is what we are all striving for, and where all independent providers are heading,” he says.
Such factors were not the original incentive for most businesses. “As these types of applications initially came to the market, there was more of a focus on meeting the financial objectives and less focus on the usability of the application,” Graham recalls. But as T&E applications have matured in the market, there’s a greater focus on convenience. Most typically, that is achieved through usability and automation, and the ability for expense reports to be completed from multiple devices.
“Benefits include not having to be tethered to your desktop, mobile receipt capture, pre-population of credit card data and travel booking data,” Graham says. “All are key features driving the enhancements to today’s expense management tools.”
Notwithstanding the value of convenience to the traveler, the positive impact on the organization itself may be the most critical factor to consider.
“Some of the most important features of today’s expense management tools include reporting features and their integration with clients’ business intelligence systems,” Bouvard says. He points out that the automated data feed from expense management tools eliminates the need to manually input data into the enterprise resource planning (ERP) system. Too, compliance checks can be reduced as expense management tools allow for a number of automated rules and controls. Receipt tracking can also be done online where legally allowed, rather than with paper.
Crum adds that automated and intuitive systems have much to offer the corporation. “Detailed information about the expense transaction coming via the card feed ensures better information about the expenses to manage policy compliance, as well as reduce potential errors and fraud,” he says. “An easy to use system also means that employees will be submitting their expenses in a timely fashion, therefore providing data to the corporation faster.”
Gaining Visibility
The potential to limit unnecessarily expensive travel costs should be a major factor in taking advantage of the features offered by T&E tools, according to Padgett. “Our customers have regularly told us their biggest problem is invisible spend from out-of-channel travel bookings,” he says.
Padgett adds that according to IDC, up to 50 percent of hotel bookings and about 30 percent of air bookings are made this way. “Travel managers need to find a way to keep their travelers happy and give them the flexibility they want without creating problems for the finance and accounting teams,” he says. “They should be looking at tools to help specifically capture invisible spend, quantify it and ultimately help businesses understand how to best serve their travelers.”
When considering the choice of travel and expense tools, make sure to balance the administrative and financial goals of the organization with the need of the employee traveler for convenience, Graham advises.
“When the process of generating an expense report becomes simple and automated for the traveler, you have a higher likelihood of compliance,” she says. She also recommends seeking to understand integration capabilities to ensure automation features, as those capabilities will be at the core of decreasing expense report processing time and costs.
Bouvard says that an expense management tool should have consistent capabilities in all relevant markets and be easily integrated with the company’s online booking tool. “It’s also important to ensure that for global expense management programs, the global experience of the expense management tool is considered holistically, including all relevant rules and regulations in international markets,” he says. “And mobile features, including receipt imaging, are a must.”
Planning for the future is also an imperative, Matthews notes. “Take the long view,” he says. “Look not just at what vendors have today, but at what direction they are heading for tomorrow. Does it match where you want to go?”
He points out that as we move toward a more intuitive consumer level experience on the user side, the impact on back office processes should be considered carefully. And a good question to ask is yourself is: What kinds of partnerships does your vendor have with other providers to make your processes run more seamlessly?
Ultimately, T &E tools offer great potential for improved management of travel budgets. “Companies need visibility into where spend is happening in order to appropriately manage budget,” Padgett says. “We recommend that travel managers find a solution that meets the needs for visibility, flexibility, automation and compliance.”
