• Strategy
  • CFO IT

Putting More ”E” in T&E

Toting up travel-and-entertainment expenses is hardly entertaining, but new technology can help.

This can help clean up what Pang describes as “years of neglect” affecting a substantial expense category. As added incentive, credit-card companies now routinely break out more and more details from each transaction — dividing a hotel charge into meals, movie rentals, and spa treatments (for the truly fortunate travelers), for example. The IRS has responded positively to this increasing reliance on automated systems. Among its efforts: accepting electronic documentation versus paper receipts for individual line items (this is part of a “level three” program that the IRS is expected to expand next year). Capturing data at a much more detailed level can give companies plenty of insight into where exactly their expense dollars are going.

This new focus on data capture and cost reduction stands in stark contrast to the old days of business travel, when the corporate travel department received commissions from airlines and effectively operated as a profit center. And, says Lane Dubin, vice president at American Express Business Travel, there was a time when T&E was the ultimate type of “rogue spending”: emotional, hard to control, decentralized, and handled very differently from one company to another.

No more. Today, a growing list of vendors offers a range of T&E service options, from licensed or hosted software to online services, with credit-card companies and banks either partnering with or competing with IT vendors and travel-booking firms. Necho Systems, Concur Technologies, and Outtask provide Web-based software; Geac offers licensed and hosted options; Gelco Information Network has a hosted product; and Ariba offers T&E among its spend-management applications, as do the big ERP and enterprise providers — SAP, IBM, Microsoft, and Oracle. Online-booking companies, including Orbitz, Expedia, e-Travel, Travelocity, Navigant, and Travelport, offer T&E spend-management services, along with American Express, Visa, MasterCard, and other financial-services firms.

The Web-enabling of T&E systems has been a boon for all customers, since it allows employees to use such systems from almost anywhere. “If there was ever an application that lends itself to the Web, this is it,” says Laurie McCabe, vice president at AMI Partners, a research firm that specializes in the small and midsize business (SMB) market. “Data security issues are low, as expense information isn’t valuable intellectual property, it’s data on what people spend. In addition, these solutions make it easier for companies to comply with Sarbanes-Oxley and other regulatory requirements.” And Web-based systems tend to incorporate current best practices, which can help SMBs to move away from highly customized expense procedures that can drain their limited IT resources.

Web capabilities were a major selling point for Canadian clothing retailer Reitmans, which says it is taking a cautious approach in rolling out a T&E system, in hopes of winning employee acceptance. Analysts agree that for all the advantages T&E systems offer, it can be hard to get employees to adapt to new procedures, especially when newly codified rules result in automatic rejections or red flags. “We’re very much committed to the Web with all our applications, and we wanted a T&E program that would fit in, be easy to deploy, and mesh with our other systems, including our Web-based PeopleSoft financials,” says vice president and comptroller Richard Wait. Reitmans, which has 876 women’s apparel stores across Canada, is just beginning to test and implement Necho Expense. As is often the case, the new T&E system will replace an in-house process — in this instance, one in which data was entered into Microsoft Excel spreadsheets and then rekeyed into a PeopleSoft application.

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