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The Future Of Expense Management


18-Mar-16 09:01
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Expense management programmes, be they in-house applications or outsourced solutions, are an integral part of travel management. The development of these technologies, along with the automation of booking process and the evolution of mobile internet, has arguably impacted the business travel industry the most in recent years. The change has given the procurement department cost-saving opportunities, HR has gained better control of employees and finance increased compliance. So what is next for the ‘accounting’ part of travel management?

Providers go mobile in order to track spending, as well as remove any barriers on the way to an effortless software that would practically do everything automatically with little time. “Seamless” was the word Kyle Ferguson, CEO of an expense management specialist Fraedom, emphasised when describing his idea of a perfect expense solution. According to Mr Ferguson, “the future for expense management is all about automation.” He explains,. “Take a really simple action such as purchasing a cup of coffee whilst on a business trip. This transaction has multiple steps involved, the majority of which come after you’ve actually paid for the coffee.”

Eliminating these steps and replacing them with simply taking a photo and uploading it online is where the future lies: a “touchless transaction” that would make it quicker but also safer than collecting paper receipts or countless expense forms.

On this path to automation and simplicity, providers rely on high-tech products from other industries that business travellers use in order to gain advantage and address demand. For example, an expense management company KDS introduced their new software for Apple Watch, anticipating the potential implications for the future. The company calls users to “take convenience one step further” and access their new software right on your wrist. So how do procurement professionals know the real value of the technology?

The data could be the answer. According to BCD Group, exposing previously ‘hidden’ expenses in business travel can provide savings of up to 25%.
The number is even more staggering if you consider that travel expenses are amongst some of the highest costs to a business.

Compliance is another issue. KDS’s data shows that around 15% of employees cheated with company expense accounts. Even though, the majority of the unregulated spend was small in size, it is the volume of those expenses that can potentially accumulate into a large amount that should worry employers. Mileage and restaurant fees were highlighted in the KDS research as the areas employees consider easy to cheat in. Using the expense software, therefore, is one of the ways to trust your workers. “It’s the honor system. It starts with company culture — if someone lies on his or her expense reports, they need to know it will get them fired”, advises Eric Sikola, general manager at Expense Cloud.

So real data shows that the potential for the use of the expense technology is there. What stops many buyers is the fear of a cultural change, but as the real benefits start showing more and more buyers will likely turn to the idea of a structured expense management program. It provides ease of use to the employees and peace of heart to the employers.

As Kyle Ferguson puts it: “technology should act as the safeguard, the virtual eyes and ears for finance and procurement teams.”

It seems it is only the matter of time before virtual eyes make their way into the screen of every travelling employee, making every cup of coffee accounted for.



This article is a piece of independent writing by a member of Procurement Leaders’ content team.


Aleksei Gontsarov Alex Gontsarov is a Procurement Leader Research Analyst. He comes from a research background with strong skills in data analysis and experience in the pharmaceutical industry.

 
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