With a global financial crisis behind us and business travel returning to levels seen before the landmark crash, companies have moved into 2011 with new focus and insight into building stronger foundations on which they operate.
For many, it seems a renewed focus on growth has not stood in the way of reflecting on the valuable insights and lessons learned through the GFC. Increasingly, we’re seeing companies looking to keep a watchful eye on expenses incurred through normal business activities, such as travel, thus providing greater visibility and control of spend, in addition to financial security.
For most companies, and particularly SMEs, the GFC served as a reality check, forcing business owners and managers worldwide to deep-dive into their books to find out exactly where their money was being spent.
More than two years on, and with business travel on the rebound, we’re increasingly seeing companies demand more control over their bottom lines and curbing unnecessary expenses along the way. But it’s not only the additional travel expenses in the form of meals, seats and hotels under the watchful eye of business owners, but more so the way in which business travel is managed.
What people may not realise is that business travel represents the second largest controllable cost for companies. And yet, many companies don’t actually know or understand where or how these expenses are being incurred, or further still, how they can be better managed and controlled.
Avoiding common mistakes
For many SMEs, and particularly start-ups, measures attempting to reduce the number and/or cost of countless business outlays can lead to greater expenditure in the long term. In the case of expense management, employee expenses are often managed entirely or largely through manual processes. Yet managing the process on a typical start-up budget can often backfire in time spent collecting, summarising and formatting data for reporting. For many businesses, this may exist in the form of one large, and likely daunting, Excel spreadsheet.
For its intended purpose, Excel excels. However, there is very little control when it comes to factors such as human error, in addition to the time spent manually entering and collating data. This is a perfect example of the old adage ‘time is money’. With significantly less time wasted on data input and retrieval, travel managers and/or finance staff are more freely able to focus on growing and developing their business.
Without a doubt, the vast majority of us have heard the groans from fellow employees complaining about the time and effort involved in managing and reporting their expenses when on the road, and understandably so. It is therefore no surprise that the level of employee interest in understanding their company’s travel policies is often not great. This therefore puts the onus, and valuable time, back on the employer to pick up the (often disorganised) pieces of the expense reporting puzzle.
What we most commonly find with businesses that use manual travel and entertainment (T&E) expense management solutions is that unnecessary time is spent correcting errors, chasing employees for receipts and/or reports and managing the miscategorisation of expenses.
In addition to the loss of valuable time, businesses are also likely to face an impact to their bottom line as a result of out-of-policy purchases made during business trips, and sometimes fraudulent behaviour.
Investing now to gain later
It is no surprise that small businesses want and need to save money wherever possible. The thought of outlaying valuable money on software often deemed a ‘luxury’ or for only those savvy enough to know how to use it, makes the vast majority of business owners run for cover.
There is also a strong misconception about managing employee expenditure. While the space is often misunderstood, it is also one in which the complexity appears greater than the reality. The same can also be said for the cost.
Misconceptions about choosing the right software for managing expenses are rife—the complexities associated with anything ‘IT’, perceptions around costs, and then the often warranted ‘where do I find the time to learn about it?’.
Let automation do the hard work
Automated T&E expense management takes much of the onus off the person charged with managing expense reporting, in addition to making the reporting process more time effective and smoother for the traveller. Automation centralises and integrates the many components involved in expense reporting, right from the point of transaction, through to the collation and extraction of data for review purposes.
A good automated system will allow for policy enforcement, removing the need for accounts staff to spot and correct out-of-policy purchases. Through an automated service, both employees and employers have access to real-time information from a centralised location, thus reducing the costs involved in procuring desktop solutions per person.
Finally, an automated solution provides direct control of information and reduces inaccuracies, having the ability to manage expenses coming directly from suppliers, credit cards, photos and more.
Some automated expense management solutions also allow companies to leverage the new technologies that employees are using while on the go. As employees begin to adopt smartphones and tablet devices for use in their business activities, companies don’t need to be afraid of the impact the change in technology will have on their day-to-day practices. A good automated solution will cater to the changes in technology use and will adapt to such trends as they emerge and grow.
Not only is a seamlessly integrated expense management offering appealing in terms of giving companies greater visibility into expenses, but it also increases the rate of real-time entry, thus giving businesses increased control into how money is being spent by employees as and when the expenses occur.
Choosing the right system
Increasingly, organisations are realising just how much they spend (and conversely, how much they can save) on their T&E expense reporting process. As these businesses start to find ways to automate and streamline their current systems, it is important that they consider the unique needs of their business travellers.
Top Tip: To get the most out of automation, find a solution that seamlessly integrates broad mobile functionality into the expense claim process.
More than anything else, mobile functionality allows travellers to claim expenses as they occur, at or immediately after the point of payment. This can drastically reduce the total amount of time spent keeping track of expenses while increasing the accuracy of claims submitted. It also helps to reduce the chances of fraud. Having the ability to take a photo of a receipt right from their mobile device, for example, allows travellers to instantly record a transaction and incorporate it into their expense report on the spot.
Top Tip: Find a solution that is easy to implement with a level of support that ensures constant uptime and flexibility.
What good is an automated system that is hard to use or requires precious internal resources to maintain and update? When you are looking for an expense management solution, think software as a service (SaaS), which means you can access the solution on the internet through a browser. These types of solutions require no hardware, software or expertise to install, since they’re available on demand and in the cloud.
Top Tip: Consider the importance of a solution that best fits your total organisational needs while having the ability to quickly implement new technological changes and adapt to future traveller behaviour.
For today’s business traveller, flexible and mobile T&E expense management solutions should include not just on-demand mobile expense claim functionality, but the ability to take a photo of receipts and tie-in cloud-based, location functionality.
As mobile phones increasingly become an accepted and preferred means of payment for more things (like taxis and parking), you are going to want your solution to be ahead of the curve to ensure employees can take advantage of new efficiencies and transparent payment options.