Every step of a business trip – from booking the flight to deciding where to have dinner – is accompanied by the arduous task of tracking and reporting expenses, often using a paper-based form or travel log submitted along with receipts at the conclusion of the trip. This rigmarole is followed by a lengthy waiting period involving various approvals until your employees are finally reimbursed. Aside from the reimbursement hassle, with this kind of time-consuming and complex manual process in place, your business often experiences significant inefficiencies and loss of control over travel expenditures. Regardless of the size of your organisation, this can add up to be a very significant chunk of change.
In fact, from a business standpoint, travel and expense (T&E) spending is one of the largest controllable costs of any company, so finding new ways to make arranging travel and reporting expenses more efficient, more visible and more accurate makes sense – and if it also happens to make the process simpler, you can get the added benefit of more satisfied employees.
Take advantage of technology
Reporting expenses is far from a science – for example, when business travel to the Big Apple intermingles with a personal sightseeing excursion to the Statue of Liberty. So how can travel managers promote compliance with the company’s corporate T&E vendor policies, verify that your employees use only authorised hotels, airlines and other services, and be sure that expense reports include all necessary information?
The technology is out there. IBM offers a web-based application, Global Expense Reporting Solutions (GERS), to simplify the entire T&E process and reduce administration costs by 50-75 percent. Employees can select from approved hotels and other vendors, submit T&E reports online and eliminate manual, paper-based reports.
Automation and imaging tools help track receipts and manage the reconciliation of expense reports for greater visibility and control, significantly reducing travel spend. And automated processes funnel approval authorisations to the appropriate people while detecting fraudulent expenses. Simple, efficient and cost-effective.
This type of expense reporting solution can also integrate with existing finance and human resources systems, for a virtually seamless automated workflow across the business. And with a more streamlined flow, both error rates and the time it takes to process reports are reduced. An added bonus? Built-in analytics to increase control and compliance.
Intelligence matters
Progressive companies are now beginning to truly appreciate and actively harness the power of analytics to take their organisations to the next level. Analytics is highly granular information that enables strategic, actionable decision making and improves the productivity, quality and competitiveness of your business. GERS is based on a sophisticated technology analytics framework that helps your business respond quickly to problems and gain insight to prevent future challenges. Predictive and behavioural analytics increase productivity, but also help improve audit, compliance, and business controls throughout the T&E processes.
In some cases, analytics can analyse data to detect and prevent fraudulent activities that would have been overlooked in a manual review. As a result you are better able to assess internal controls, identify process gaps and analyse trends in the business, reducing human intervention and creating continuous performance improvement across the board. Plus, analytics can help position your organisation to adopt best practice standards for performance comparisons and continual reviews that enable the ‘resetting’ of goals as business conditions warrant, resulting in significant error reduction, improvements in quality and substantial cost savings.
Here’s an example: A US services firm had recently outsourced their T&E management processes. Leveraging its provider’s analytics capabilities, the company began to track its employees’ compliance to the company’s expense policies. What they found was surprising: rampant policy abuse was resulting in excessive costs to the organisation every year.
One of the strongest violations involved the company’s policy on employee parking expenditures. A rapid, automated analysis of current and historical employee expenses reports quickly identified an average per-person parking expense rate of $16.00 per day. With local parking rates significantly lower than $16, the analysis identified that the company’s required receipt limit of $25 was resulting in abuse of the system. Because the employees weren’t required to supply documentation, they had developed the habit of claiming a $16 standard for parking fees, regardless of what they’d actually paid. As a result, the company was losing significant amounts of cash – completely under the radar of the organisation’s finance team and T&E systems.
Doing business better
Under the newly outsourced solution, the company was able to immediately make a change to their receipt rule, enforcing parking receipts as required documentation in all cases. As part of this change, all employees were required to fax in receipts electronically, eliminating the need for additional manual steps in the end-to-end T&E process. The net result? Significant annual savings without additional work for the company’s back office.
Ask yourself: how can I help my organisation improve its overall business performance? An innovative and flexible expense reporting solution like GERS helps companies like yours reduce the total spend associated with travel expense reporting. It’s quick to implement, cost effective and easy to use, making business travel hassle free.
Ray Curatolo: rac@us.ibm.com; www.ibm.com/services/expensemanagement
