Since on an average T&E expenses represent around 10-12% of a company’s overall expenses, more businesses are realizing the importance of having T&E expense management processes and policies in place.
The biggest problems business face with respect to T&E expense management is poor visibility and data over spends, lack of control over employee expenditure, high cost of expense processing and lengthy reimbursement cycles. Slowly, businesses are becoming more aware of the benefits of moving away from manual processes of T&E management. Companies who have been using automated expense management solutions for T&E management are also witnessing increased RoI with these solutions.
Moving from a paper or spreadsheet based expense reporting process to a web/mobile based solution has many benefits, primary of which is cost. According to a 2016 Paystream Advisors study, average cost of processing a manual report was $26.63. Through automation, businesses were able to reduce this cost to just $6.85 for each report.
Traveling employees had to take time of their work to manually report expenses on paper vouchers or excel sheets. They also had to collect each expense receipt and file them with the report. This was a highly cumbersome process. Through mobile app based expense management solutions, employees could report an expense just by clicking or scanning the receipt on their phones and submitting it, completely on the go. On-demand services company, Dunzo was able to improve employee productivity by up to 70% through Happay mobile expense management solution.
Expense reporting is just a part of T&E management. Creating travel itineraries, seeking approval for travel, booking tickets and accommodation may also involve inefficiencies in a business. In 2017, more companies are looking at solutions that could integrate and streamline this entire process along with T&E expense reporting. By integrating travel itineraries, businesses could pre-approve travel spends, and control T&E expenses before they are incurred.
Though most medium and large businesses maintain expense policies, these policies could never be enforced because of a lack of visibility into T&E expenses. Manually examining each expense according to the allowed expense limits of each employee in each category was practically impossible in a large organisation. Since most web or mobile based T&E expense management solutions allow for the integration of expense policies, reports which don’t comply with them are flagged automatically. This allows companies to effectively enforce travel expense policies.
REDUCED REIMBURSEMENT TIME
Manual reporting, approval, verification, reconciliation and reimbursement of business expenses is a costly and time-consuming affair. Most businesses would take 10-15 days on an average to distribute reimbursements from the date of submission of expenses. This was an issue for both the employee and the employer. Through automation, businesses could reduce the reimbursement cycle considerably. Cloud telephony provider, Knowlarity was able to reduce expense reimbursement time from 15 days to just 2 days by using Happay T&E expense management software.
Most businesses already use ERP and accounting softwares to keep track of the organisation’s assets and liabilities. Now companies are actively seeking out T&E management solutions that can be integrated to their existing ERPs so that T&E expense data doesn’t have to be manually entered into their system. This makes life much easier for the finance and accounting teams. Apart from ERP integrations, companies are also seeking out T&E management integrations with other travel services such as travel booking services or with ride-hailing services such as Uber.
Through T&E expense management automation, businesses have been able to to see returns that far exceed their expectations in the year. A Certify study revealed that though only 15% of those surveyed expected a shorter reimbursement time, 8% expected increased frequency of reports and 21% expected richer insights into spends, 42% businesses cut reimbursement time, 28% witnessed more frequent reporting, and 41% enjoyed increased visibility into expenses. The innovations and advancements that have taken place in the T&E space has transformed T&E expense management software from “good to have” to a “must have” for all businesses, big or small.