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Automating T&E management cuts cost, increases productivity

Automating travel and expense management can cut costs and increase productivity. But first a company must have a workable T&E management policy in place.

Sean Feehan remembers all too well what it was like to collect employees' travel and expense reports before his company ditched spreadsheets and went mobile.

Feehan, vice president of New Jersey-based GWF Associates, and his management team, had to chase down spreadsheet-generated reports -- and once they got them, it didn’t necessarily mean they were complete. More often than not, employees forgot to attach receipts or fully explain expenses. Managers would have to follow up with employees; but by then, they were back on the road accumulating more expenses.

"Boy, it can make your life troublesome," Feehan said.

But GWF Associates, which creates interactive multimedia technology that businesses use to display their products and services at trade shows and other events, not long ago provided its employees with a mobile application that automates the filing of travel expenses. With their mobile devices, employees can photograph receipts at a restaurant or in a hotel lobby, hit a few buttons and return to work.

Digitizing T&E management pays off

GWF Associates joins a host of organizations that recognize they can cut costs and increase productivity if they fully digitize travel and expense management. Aside from making life easier for managers and workers, the data collected from a fully digital process enables organizations to take a deeper look at how and why employees spend the company's money -- potentially improving T&E management practices.

Some companies are moving beyond mobile travel and expense applications as just a transactional system and are also customizing reports that show if employees are adhering to policies, according to Chris Pang, a research director at Gartner Inc. These reports illustrate larger spending patterns, he said.

"It is being used as a basic transaction engine, but the second stage is using it to see larger system reports," Pang said. "You have to wait awhile for these reports to get rich with data to point to areas of improvement, but once the data is there, companies can get a really comprehensive and detailed look at travel expenses."

Indeed, Scotland-based Administrate uses two tools to get a full view of car rental, airline, train, hotel and meal expenses. Even though the company, which develops training and learning management software, has only five employees, the receipts and reports of five employees nonetheless still require review -- and that proved problematic with the old way of doing things.

"Previously, we used spreadsheets, a scanner and email submission," said Administrate CEO John Peebles. "It was really frustrating and time-consuming, and it meant that expenses tended to come in as 'lumps' when a team member finally got fed up and sent in three months (of expenses) at once."

Now, Adminstrate's employees, who travel routinely, simply take a picture of their receipts and the mobile application Receipt Bank extracts key data, which is uploaded to the online accounting software Xero.

Mobile expense management means savings

Companies cut costs by about 18% when they switch from manual expense tracking to mobile management, according to Jerame Thurik, the North American general manager of SMB for the travel and expense management software company Concur. Those cost savings include money saved by management processing expense reports as well time saved by employees.

Not to mention, with a streamlined, digital expense management process, companies have improved visibility into how employees travel, Thurik said. With a better handle on hotel expenses, for instance, a company can negotiate better rates, he said.

"You're controlling and driving employee behavior, and you then can leverage that spend from an individual and organizational level," Thurik said.

Adminstrate was already reviewing travel expenses closely before using a mobile application, but if anything, the technology only reminds employees of the company's mission to not overspend. Rather than having set expense policies, Administrate promotes a corporate value of frugality, Peebles wrote in an email. "We want employees to act like owners of the business (because most are) and treat the company's money as they would their own," he said.

Mobile app increases spending awareness

Feehan, of GWF Associates, said he couldn't put a dollar figure to the savings that TDF Tracker, the mobile application that his employees use to record expenses, has brought because the company eschewed paper spreadsheets. But having an app readily available on their mobile phones more often than not makes employees aware of their obligation to record meal and hotel expenses. In fact, they enjoy hitting the "submit report" button on the app when they've ended a trip and are seated on the plane, ready to take off and return home, he said.

It would be easy to think that many companies have already fully automated travel and expense management, but many still rely on paper receipts and Excel spreadsheets, Gartner's Pang said. Typically, companies look for a better solution only when they've grown so much that their current expense management processes don’t scale, Pang said. Companies also have the desire to modernize when they fear an audit and suddenly want to have accurate and real-time visibility into travel spending, he said.

But before a company even begins to consider new technology, it must first have a common and workable travel and expense management policy in place -- preferably a global one that makes exceptions for local practices and requirements, according to Pang. Otherwise, a lack of policy will only delay implementation of the technology and put proper management at risk of failure, he said.

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This was last published in December 2014

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