Travel and entertainment (T&E) expense is often considered to be the second- or third-greatest controllable expense for a company, after wages and sales-and-marketing expense. Expense managers who can juggle the right internal and external processes, software, and potential for employee error can save their companies a substantial amount of cash.
The right investments can go a long way — just ask Karen Hutchings, a recipient of Business Travel News’ “Multinational Travel Manager of the Year” award and EY’s “Executive Better Begins with You” award. Hutchings holds “Whiteboarding Projects,” twice a year to ask her team what they would change about travel programs at EY, which wants Hutchings to find $63 million in savings and cost avoidance in 2016. That would be a big bite out of costs, even for a company with offices in more than 150 countries whose annual air spend is $600 million.
What about employee error and potential fraud? According to a report by Oversight, which analyzed 10 million transactions totaling more than $1 billion in expenses, 82% of fraudulent activity was made by only 5% of employees.
Sometimes employees may not be fully at fault. They may need office supplies, temporary employment services, telecommunications, and other items related to travel. They do not want to pay for these item out-of-pocket, but at the same time expenses for them are considered fraud and misuse.
The longer fraudulent activity lasts, the bigger financial impact it has on an organization. Companies are well-advised to detect non-compliant behavior as fast as possible, and without inconveniencing other card holders within the travel program.
With T&E representing such a large percentage of the average company’s budget, it’s time to think more strategically about expense management processes. That means ending tedious manual expense reporting through the use of spreadsheets, instead implementing an automated process that provides the functionality, accuracy, reporting, and control required to manage expenses.
Here are six articles that point to the value of T&E expense management automation. They cover travel-expense reimbursement, rising travel prices, T&E’s impact on small businesses, and the annual end-of-year avalanche of expense-report filings.
Metric of the Month: Travel Reimbursement
Your business travelers are the face of your company. They’re the ones who go out and meet the clients, roll up their sleeves, get down in the trenches, and close the deal. It pays to keep them happy while they’re away from their families, and one way to do that is to reimburse their expenses in a timely manner. When companies fail to do this, it costs them — in more ways than one. Read more.
Business Travel Prices to Rise Modestly in 2015
Air, hotel and ground transportation prices for business travel will be neutral to slightly higher across all regions in 2015 amid modest global economic growth, a new survey predicts. The American Express Global Business Travel Forecast 2015 forecasts price hikes ranging from up to 6% for short-haul, business-class airline flights to as low as 0.5% for car rental base rates. Read more.
Brace for Avalanche of Expense Reports on Dec. 15
December 15 will almost surely bring the year’s greatest volume of expense-report submissions for travel and entertainment. In fact, that can be counted on happening every year in December, according to information released by Concur, a provider of T&E spend-management services. Managers who haven’t been keeping track of what T&E expenses they haven’t paid for yet may be in for a rude surprise. Read more.
Where Are Your Travel Dollars Going?
Increased business-travel activity, after all, serves as an informal barometer of economic growth. Employees are likely booking more plane flights, rental cars and hotel rooms in an effort to serve — or attract — a growing number of customers. But before their employees hit the road, companies would be wise to scrutinize their travel spending to make sure they are spending efficiently to support their goals. As one finance executive told CFO Research in a global study of business spending and investment, “It’s not so much about spending more or less. It’s about spending differently.” Read more.
Travel-Expense Management Tortures Small-Biz CFOs
T&E management is generally viewed as a hassle, both for employees collecting receipts, filling out expense forms, and trying to get reimbursed, and for accounting departments attempting to gain visibility into how much is being spent each month so it can close the business’s books. As the economy improves, travel budgets increase, and looking at travel and entertainment expense management strictly as a back-office function makes less and less sense. Read more.
Getting Off the Paper Trail
Everyone hates expense reports. Road warriors hate collecting receipts and filling out forms to get reimbursed. Finance hates trying to decipher a patchwork of receipts copied helter-skelter onto a sheet of paper, and everyone, especially CFOs keeping their eyes on cash flow, hates waiting to be paid. Expense-reporting apps for smart phones can save time and money for businesses. As for saving trees, perhaps not so much. Read more.