Some travel costs are easily benchmarked. From average ticket prices, to the daily rate of rental cars in specific markets, to the daily rates of hotel rooms across brands, many data points are quickly examined and compared.
Not so are the actual costs of certain processes.
Travel reimbursement is one of those processes. Consider the following…
Multiple inefficiencies combined with inaccurate accounting results in maximized losses from out-of-policy behavior. Put simply, asking travelers to hang onto receipts, then submit manual reports and wait on reimbursement are actually several inefficiencies. The accounting team manually reviewing expense reports, along with a long approval chain, requiring multiple layers of approval before an expense is reimbursed, are at least a couple more. That’s multiple steps in a complicated process all calibrated to keep travel within policy. How much would be saved time-wise by automating some or all of these steps?
While some companies, especially smaller ones, just throw up their hands and decide to live with the extra costs of out-of-policy travel, we’ve learned there is a way to cut those costs without creating additional expense through having an integrated travel management solution. Done right, this will eliminate manual expense reports, enable automatic approvals based on policy and reduce the amount of time spent by employees throughout your firm on the process.
The major pillars of this solution are…
- A corporate credit card. Giving travelers a company card for airline, hotel, car and dining expenses eliminates expense reports and reimbursement altogether. A corporate card can give your accounting team increased visibility into expenditures, but it can also prevent out-of-policy purchases in the first place. Your managers can set spend controls, so instead of having to track down employees to ask questions about unexpected costs, out-of-policy purchases won’t even be processed. When combined with virtual credit cards for guest and infrequent travelers (which also have spend controls) these automated fixes virtually eliminate reimbursements.
- An online booking tool loaded with your travel policy. Once your TMC has loaded your policy (and preferred suppliers) your online booking tool will automatically push in-policy choices to the front where travelers can select them. Out-of-policy choices (if allowed) can be tied to automated travel approval emails where one click lets managers quickly pass muster on them. (Traditional agent service can perform the same function but it’s a manual process.) By adding black car companies, taxi suppliers and ride sharing companies to your preferred supplier list you have brought all aspects of a corporate travel itinerary into view where everyone managing travel can quickly pull up the details of the cost of a trip.
- Detailed travel reports. Getting regular metrics on key travel management goals like advance purchase windows, average ticket prices and policy exception reports will reduce the need for getting down-to-the-penny accounting of costs. By controlling employee behavior at the individual level, managers can address recurring problems directly, while letting the automation of the first two systems enforce policy the rest of the time.
At this point you will notice we haven’t mentioned automated expense management solutions. While, of course, we work with many clients who have these in place, and swear by them, we also have many clients who don’t want the extra expense, or feel it isn’t warranted by their volume. Deciding where your company stands on the issue is best done by calculating the total cost of the accounting process (including employee time), and comparing it to the cost of program. Then you should consider a few other factors. Does your company have an enterprise back-office accounting program it’s attached to? Will the automated expense management program easily integrate with your back-office program?
If the answer is yes, you might want to investigate an expense program like Concur Expense which offers such features as automatic loading of cost details from your travel agency, easy input of paper receipts and automatic creation of expense reports. And it offers out-of-the-box integration with many back-office accounting programs.
You should also survey your travelers to see how they feel about expense reporting and reimbursement. If they’re all unhappy with the process, you should probably look into it a bit more seriously.
But, not before trying to get control of your T&E expenses with our suggested solution.
Assembling the data points to review your company’s spend management system, considering the amount of time it takes for employees to report expenses and receive a reimbursement, as well as the time it takes for accounting to complete the monthly reconciliation process – you can get a reliable verdict for whether your expense management process is in need of improvement.