Automating expenses is just the first step towards the seamless capture and reimbursement of travel spend, says Catherine Chetwynd
Visibility is the business travel buzzword and is prevalent in expense management to the point that some might feel they hear too much of it. Think again, however. The National Fraud Authority estimates that £100million per year is lost in the UK to fraudulent business expenses such as illegitimate and exaggerated claims. And The Association of Certified Fraud put the cost of expense fraud at some £30,000 per UK company per year – one in five employees think it is OK to exaggerate claims, it turns out. Visibility is a commercial imperative. Automation overcomes the problem by channelling users into company policy. It improves efficiency, allows faster and more accurate submission of expense claims – with attendant faster payment – and makes it easier for travel managers to see trends and negotiate discounts on the back of them. There is ever greater demand for online integration of expense management and booking tools, according to Barclaycard, which also keeps travellers within policy. Moreover, apps enable employees to change and manage their itinerary and reconcile expenses while on the move.
This may sound seamless but it does not remove some of the challenges organisations face when attempting to manage expenses. Astonishingly, around 40% of businesses still use receipts and spreadsheets, slowing down submission, approval and reimbursement with a cumbersome and costly process that undermines control and reduces visibility.
Even with an expense management system it is not plain sailing. “If your company has complex rules for expense approvals, allocations and reimbursements – law firms are a good example – does your solution
have the flexibility to handle these or do you end up changing your business processes to account for the solution’s shortcomings?” asks General Manager EMEA for Chrome River, Nick Ludlow.
“Is the user interface available in the native language of all of users and can the system handle the tax regulations in every market where you do business?” Further, does your chosen system work well on mobile devices, particularly where BYOD policies bring numerous platforms into the mix?
American Express is seeing growing call for spend analysis tools to enable customers to better monitor and manage policy compliance, but data alone is not enough.
“Companies are looking to their corporate card providers for consultancy, so they can best leverage the data to drive compliance and control,” says General Manager Global Client Group International, Fabienne Cauli.
“The fact that we are seeing increasing card acceptance in areas such as taxis means that more and more aspects of travel can be booked, and monitored, as part of an expense management programme.”
However, errant behaviour can derail compliance. “Fragmentation of spend across multiple providers is getting more acute as business travellers opt for suppliers in the sharing economy,” says Director of Barclaycard Commercial Payments, Maria Parpou.
Recent research from Barclaycard highlighted further frustrations for travel managers, which include travellers using their personal cards for business travel expenses and booking trips via mobile apps, resulting in their employers getting data only when they submit expenses.
Difficult first steps
Change management is another problem for organisations when they introduce an online expense management system. “There is a distinct lack of readiness for the change required to automate the process and that will affect finance leaders as well as employees, who have to learn how to use a different tool,” says Senior Director Account Management for Concur, Natalie Gwilt. “That is often the hardest part because people who are used to stapling receipts to a piece of paper don’t want to change. It is easier for them but does not meet the needs of the business. And when automating processes, organisations often miss the opportunity to implement best practice but instead try to shoehorn existing processes into the tool.”
Keeping it simple
Despite these problems, expense management systems do simplify the process. Concur recently launched Concur Travel and Triplink to the SME sector. Even without a TMC or self-booking tool, they can track spend through signing into Triplink and from there all costs automatically populate an expense report in Concur.
Xpenditure started life as an expense management app and, last year, alongside booking tool ialbatros, was acquired by Sodexo. The two have been combined to provide an integrated service, allowing users to generate an expense report and export it to formats ranging from PDF to accounting software such as Sage.
American Express’s payment product, Business Travel Account, enables customers to manage travel expenses through a centralised account, putting everything in one place, while a reporting tool provides secure access to corporate card data.
Barclaycard clients also have access to an online platform where they can interpret data from their card programme, all in one place. “There are widespread efforts to integrate payment data into expense management tools so it flows from card accounts into the platform and pre-populates expense reports,” says Maria Parpou. “Requests for this have skyrocketed in recent years.”
Walking plastic remains popular but virtual cards continue to grow in popularity. “I believe that combining virtual cards
When automating expenses processes, organisations often miss the opportunity to implement best practice”
with digital wallets – another important development – will be extremely powerful in helping companies effectively manage expenses in the future,” says Parpou. According to research undertaken by HRS through analysis of 30,000 corporate hotel bookings, half before the introduction of virtual cards and half afterwards, savings come not only from time efficiencies and reduced fraud, but travellers also book more wisely when using virtual cards, possibly because the increased transparency of the tool makes them feel exposed.
As a result, bookings in regional chains and local hotels (less expensive than major brands) grew from 30% to 40%, and travellers booked 8.5 days in advance of travel rather than the average 11 days, contributing to lower rates, and the 'no show' rate dropped by 15%. The average cost of a room after implementing virtual payment dropped by 12% to €98.60 from €112.30.
Chrome River’s Nick Ludlow highlights the back-end capability of expense management: “Some examples of this are the ability to enable pre-approvals for travel bookings, per diem integration, real-time analytics and sophisticated business rules capabilities for approvals and policy enforcement,” he says.
On the horizon
Suppliers continue to pursue the ultimate goal in digitising data and Airplus is trialling with some TMCS the automated collection of hotel information from Airplus products and merging it with transaction data.
Also new is Airplus Connect, which sends transaction details live to the traveller’s mobile phone, complete with a bleep alert, allowing the user to photograph the receipt and swipe it, sending the lot to their expense management system.
Airplus is also integrated into restaurant technology to create dine+go, which recognises customers on arrival. They can order on the app or verbally and can leave without waiting for the bill. Trials are cooking in Germany, with France next.
Concur launched Budget Insight in February this year, highlighting to customers not just what they have spent but measuring the departmental budget against which they are spending. “It allows them to make informed decisions about business spend,” says Natalie Gwilt. This was followed by Drive, an app that lets drivers track their journey and the results are entered automatically into an expense report, removing any likelihood of rounding up mileage.
And Chrome River recently inaugurated phase one of PROSPER, which integrates with companies’ CRM systems to juxtapose T&E with sales spend, so they can allocate expenses to sales opportunities and see how various types of spend contribute to revenue.
Traveldoo has launched a mobile app to allow travellers to create and manage expense reports while on the go. Features include multi-currency, geocoding and voice recognition, and photos can be used to record expenses and receipts. Once submitted, reports can be tracked and integrated with ERP, HR and accounting systems.
“We surveyed more than half our customer base. Up to 70% indicated a requirement for a mobile app specialising in expense processing and more than half these respondents wanted to complete their expenses while on the go,” says CPO for Traveldoo, Dan Fitzgerald. “We have used these findings to provide consumer-inspired functionality in a simpler and more engaging format for the business traveller.”
The final analysis
As automation becomes increasingly widespread and artificial intelligence and bots hover on the horizon, it becomes apparent that this is not just about convenience but also data collection and analysis. These are the bedrocks of visibility and control and make a fundamental contribution to travel policy and compliance. Expense management is once again undergoing a transformation as technology and creativity combine to ensure providers stay ahead of the virtual game.
Automation is not just about convenience but also data collection and analysis. They are the bedrocks of visibility and control”