Once upon a time, completing a business trip meant sitting down with a pile of receipts, filling out an expense report and doing some copying, and then submitting a pile of papers for approval. But travel and entertainment expense management solutions, which allow data from credit cards to flow automatically into online expense reports, have eliminated that drudgery for business travelers.
Now companies are making an effort to get what they need on the travel and entertainment (T&E) front: data they can analyze to get a better understanding of that spending and use to bargain for better deals with airlines, hotels, and other vendors.
A study by the Aberdeen Group, a Boston-based information technology research firm, found visibility into T&E spending was cited as the top challenge by 51% of companies.
“Visibility is really the cornerstone of an effective spend management program,” said Louis Berard, senior research analyst in the global supply chain management practice at Aberdeen Group, noting that understanding T&E spending plays into companies’ ability to forecast and budget such spending.
The amounts involved are considerable. Aberdeen estimates T&E comprises 10% of corporate spending.
Kevin Phalen, head of global card and comprehensive payables and head of public sector banking treasury sales at Bank of America Merrill Lynch, said T&E can make up an even higher portion of spending at professional services firms like consulting companies or law firms. And companies view travel as one of the easiest expenses to control, along with head count, he said.
Phalen said companies want two views of their T&E data: “Tell me what’s happening with my key suppliers—airlines, hotels, restaurants,” he said. “On the flip side, tell me what’s going on with my travelers—what’s in compliance, what’s out of compliance, what are we spending on, what are the add-ons from airlines. With this data, companies can ensure adherence to their compliance policies and also look at how they should change those policies over time.”
Bank of America Merrill Lynch has launched a tool, called Dashboard Analytics, that gathers all of the information on transactions occurring on a company’s corporate cards, Phalen said. “Wherever those cards are being utilized, we’re getting that data on a daily basis and sharing it with our clients,” he said.
The company gets the data on card transactions within 24 to 48 hours, he said, which could well be in advance of employees’ submitting their expense reports. “This helps the buyer to get the information about their suppliers,” said Phalen, pictured at left.
The information helps companies spot trends in T&E spending and compliance with T&E policies, he added. B of A can break down the data for companies by division or subsidiary, or at a country or regional level. “It gives them local data, but also brings it together globally in the event they organize their operations on a global basis, which is becoming more and more common,” Phalen said.
Aberdeen’s study suggests that integrating the T&E expense management solution with a company’s ERP system can give the organization a better view of its T&E data. According to the study, companies with better visibility achieve other benefits, including cutting their costs for processing T&E expense reports: They spend just $12.51 to process each expense report, 39% less than the average cost of $20.65.
Greater visibility could also help companies figure out the return on investment they’re getting on their T&E spending, Berard said. “The largest problem that organizations have had is to understand their ROI.”
He cautioned, though, that companies can’t just gather data; they have to make use of it. “You can gain as much visibility as you want, but people need to be looking at and analyzing the data,” he said.
Another approach to increasing companies’ data on T&E spending is combining the T&E reporting solution with the online travel booking tool a company uses. Berard said Aberdeen’s survey found 90% of best-in-class companies use such an “end-to-end” solution versus 66% of other companies.
“What that does is solidify the link between travel management and expense management,” Berard said. “That’s giving you that superior visibility into how employees travel.” Companies that use online travel booking have the ability to spot trends and negotiate better contracts with suppliers such as hotel chains and airlines, he added.
A.G. Lambert, vice president of product management and strategy at Concur, whose T&E expense management software is used by 1,800 companies, said he’s seeing “broad adoption” of the practice of combining travel booking with the T&E expense management solution.
Now Concur is working to gather still more data for its corporate customers by capturing information about travel plans that aren’t arranged through its online travel booking tool, perhaps because the employee booked a room through a conference website or a hotel website. “If you book at the hotel site, you can forward the confirmation and we will process that,” said Lambert, pictured at right. “It’s really extending the reach of how much travel data we’re capturing so we can do better analysis of your travel spend.”
Giving business travelers access to T&E reporting through mobile apps is another trend. “The expectation is that all of this information needs to be mobile-enabled,” BofA’s Phalen said. “When you think about the T&E space, it’s all about making it easier for the traveler.”
Mobile applications can also help companies get more accurate information, Lambert said. “People stuff receipts in their wallet or purse, bring them back, try to sort them out and make mistakes. In some cases, they don’t have a receipt.”
Concur is working with American Express on a tool that lets employees know, as soon as a credit card transaction is processed, whether they need a receipt. If they do need a receipt—for example, for a hotel room or a transaction that’s over a certain dollar amount—travelers get a buzz on their phone alerting them to snap a photo. Concur then processes the photo and uses it to fill in the relevant fields for that transaction.
“Really taking out the human factor is an important way you can increase the accuracy of the process,” Lambert said.
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