A few years ago, astronaut Buzz Aldrin shared a surprising anecdote about the 1969 moon landing mission — he was required to file a travel expense report with NASA! His reported expenses for the eight-day, 480,000-mile trip totaled $33.31 for the use of government vehicles, including cars, planes and spacecraft.
Businesses today are also dealing with travel and expenses that are out of this world.
According to several industry reports, increased globalization has driven spending on business travel to nearly $1.5 trillion per year, with the typical three-day trip costing nearly $1,500. Despite the financial impact, almost half of all businesses still rely on manual, paper-based processes for reporting and reimbursing these expenses.
Manually collecting receipts and filling out mileage forms on paper or a spreadsheet is time consuming for both travelers and accounting staff. The Global Business Travel Association and the Aberdeen Group report that it can take up to three weeks to process a typical expense report at a cost of $58 per report. That adds up to a significant expense for enterprise organizations that process thousands of such reports each quarter.
Gaining Control
Travel and expense management (TEM) software that automates the creation, submission, approval and processing of expense reports can provide a faster, more efficient and more reliable way to handle expenses. In addition, TEM solutions include powerful analytics tools that enable simple yet detailed auditing of expense reports based on a wide range of variables, giving organizations a clearer picture of how much they are spending on airfare, hotels, meals, mileage and other expenses.
Such audits also reduce losses due to error or fraud. In a recent audit of more than 3 million expense reports, AppZen found that employees commonly try to sneak in unapproved expenses ranging from car washes and cocktails to clothing and cigarettes. One road warrior was adding a $10 Amazon gift card to every gasoline purchase and then just turning in the credit card receipts. The Association of Certified Fraud Examiners has estimated the median annual loss per employer for expense fraud is $25,000.
TEM solutions can also help control costs before the trip. Many organizations have a variety of spending controls related to travel. For instance, they may have arrangements with specific hotel chains, airlines and restaurants for corporate discounts. However, they may not have any process in place to ensure that these guidelines are being followed when employees are booking their trips. Creating spending rules within TEM software helps ensure that your employees use preferred vendors and follow policy.
Easy Integration
Mobile and web interfaces make expense reporting much simpler by allowing travelers to capture receipts on the go. Quick entry wizards automatically enter expenses and make it easy to enter complex bills, track mileage and enter per diem expenses correctly.
These solutions are particularly effective when used with an HR portal. Employees gain easy access to the system for near real-time submission and faster processing. Additionally, it allows easy integration with ERP systems and accounting software, allowing organizations to understand spending trends. Aberdeen Group analysts say this integration reduces processing costs by 33 percent, improves policy compliance by 34 percent and cuts reimbursement time by 35 percent.
In many organizations today, travel and expenses represent their second-largest line item following payroll. Given the stakes, it only makes sense to shift to fast, flexible and effective TEM solutions with increased automation capabilities. These solutions can reduce errors, cut costs, flag company policy violations and reduce the workload on accounting staff. Those are bottom-line benefits that will have you over the moon.
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Written and composed by Lyndsay Soprano, Director of Marketing
