With business travel surging, it’s time to revisit expense technology solutions
The economy is back, and so is business travel, with more options and convenience for travelers than ever before. There is a dizzying array of travel booking sites, but now you can also just type in any two airport codes and buy a plane ticket straight from the Google search results page. Taxi alternatives Uber and Lyft are gaining ground, and Airbnb is becoming a viable alternative to hotels.
Fortunately, the same forces of innovation are moving travel and expense management forward as well. The trick for managers is not to get distracted by all the shiny new toys, and stay focused on moving from processing expense submissions to optimizing and driving how the company spends money.
With complexity rising along with budgets and the recession still visible in the rear view mirror, organizations still need to hold tight to the reins while striving to think more strategically about the category, says Christopher Dwyer writing in CPO Rising. To do so he says, there are three goals every travel /expense program must work towards:
- Linked capabilities that can capture all booking options. Open booking is becoming an accepted practice. Options such as Airbnb and Uber are cost effective but fall outside of preferred supplier programs. To achieve total visibility, travel and expense management programs must have capabilities that can accurately capture all booking options, even non-traditional sites and mobile applications.
- Alignment between the travel / expense management program and procurement and finance objectives. Travel and expense management often sits somewhere in finance, with only some cross-functional ties to procurement. To be strategic, shift from back-office processing to cost savings, compliance, and cash management.
- Touchless expense processing. Just as in the accounts payable world, the more seamless that expense processing is, the greater the efficiencies and cost reductions. All enterprises should seek a “straight-through” process with full automation of expense creation, submission, approval and reimbursement. This not only eliminates errors, but also provides near real-time access to data, so finance can better manage cash flow.
This last aspect, real time visibility, is critical for really becoming strategic, and that’s where innovative new technology can really shine. In traditional systems, the first time the finance team has visibility into money that has already been spent is weeks or months after the expenditure - after the employee has accounted for all expense line items, gathered receipts, and submitted the report for approval.
This means budgets are never accurate and finances for past purchasing periods must be reworked to accommodate expenditures the company was blind to. There are several ways modern systems can capture expenditures as close to real time as possible:
- Integrating with travel booking systems to capture expenses at the time of booking instead of at the time of employee submission
- Integrating with corporate credit card and purchasing programs to capture expenses at the time of purchase
- Simplifying employee expense recording and submission to allow employees to capture expenditures immediately, instead of saving stacks of receipts for future entry. This can be accomplished by having responsive, highly usable interfaces, and by providing strong mobile capabilities with innovative features like voice-based entry.
These capabilities bring expense capture closer to full automation, while also providing richer detail so you can have visibility into exactly what you're spending, with which vendors and with more consistency, for example in vendor names and categories. Coupled with process automation, analytics and reporting on the back end, becoming more strategic is now within reach.
With this enhanced visibility you can now drive policy, direct appropriate categories to procurement instead of out-of-pocket, negotiate preferred vendors and rates and start to drive savings and compliance.
Nobody wants to go back to the days of having to go to a travel agent or wait endlessly on hold to book a flight, hotel and rental car. With travel money flowing again, no one should want to go back to merely doing a higher volume of expense processing.
You can move from processing to optimizing by putting in place the tools, processes, and incentives to enable employees to act as procurement agents with every single transaction they do – without them having to do anything outside of what’s normally required of them.
As Dwyer notes, “companies that can effectively develop travel and expense management processes that drive strategic value from this classic function will find that this complex spend arena isn’t just an unfortunate cost of conducting business . . . it’s a value-added program.”