Earlier this year, Forrester Research surveyed 348 financial decision-makers around the globe regarding corporate expenses. Almost a quarter of executives tallied indicated that Travel & Entertainment (T&E) expenses were one of the top three most challenging operating expenses to control - second only to maintenance expenses.
The study showed these T &E challenges arise mostly because companies review expense reports after the fact. Additionally, employees have to manually input their expenses for reimbursement. More than 80% of companies with expense management systems, whether they were off the shelf or custom built, reported that input was manual. The report further found that employees do not like their T&E systems because they are time-consuming and because they require manual data entry.
To prepare expense data for analysis, 59% of the respondents indicated their companies still use spreadsheets. Additionally, the survey found that 42% of the expense management solutions couldn't import data from external systems. These shortcomings lead to a lack of understanding of how travel dollars are actually spent and lessen the opportunity of these companies to seek group discounts or consolidate vendors.
60% of respondents said they would like the ability to access expense reports and dashboards on mobile devices. Almost half of the respondents said they would like easier and quicker modification of reports along with the capability to receive T&E data from outside sources.
On a one to five scale, with five being very important and one not at all important, 80% of those participating in the survey ranked as a four or five the need identify T&E spend that fell outside their programs. The second most important issue for these financial executives, according to the survey, was the management and utilization of preferred vendors. 77% of respondents also sought to compare T&E spend with similar size firms or firms in their same industry.
Survey responses show that most businesses wait until employees enter their T&E data manually. Accordingly, review of expense compliance is after the expense occurs - indicating that companies do not get the benefits of approving T&E expenses before they happen. Online expense reporting systems like Chrome River EXPENSE allow for expenses to be pre-approved before the expenses are actually incurred.
Forrester suggested several steps companies could take to better control expenses that include:
- Implementing processes and systems that provide needed T&E information to managers responsible for controlling and monitoring a company’s spending on T&E
- Use of tools that show management key opportunities for cost-savings
- Negotiation of discounts with travel vendors
- Upgraded information to employees that travel regularly
- Integrated external data regardless of the data source
- Mobile capabilities
Although implementing expense report software with all these expense control measures might seem daunting, companies should look to prioritize T&E features, tools and processes and then develop a roadmap for their integration.
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- Creating and Enforcing Expense Policies: The Happy Medium for Cost Control and Employee Satisfaction
- Why the Manual Invoice Processing Model Is Broken (And How to Fix It)
- 6 Reasons for Implementing an Expense Management System
- How Expense Automation Can Increase Manufacturers’ Profit Margins
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Wow! This Chrome River is great. Word has spread [in our firm] and people that were not invited to be in the pilot group rollout have asked to be included!