Three thousand hours. That’s equivalent to 125 days — more than four months! — wasted by companies whose employees are tasked with manually generating expense reports and manually correcting the errors that inevitably arise.
That’s according to the latest research from the Global Business Travel Association (GBTA), which published the findings to a new report on expense management generation this week.
“Expense Reporting: Global Practices and Pain Points,” sponsored by HRS Global Hotel Solutions, unleashes some more troubling data about why manual expense report management is crippling corporations’ efforts to manage their time more wisely. PYMNTS breaks down the top findings of the report below.
The concept that manual processes are far slower and more prone to error than automated ones is nothing new. But while researchers have been sounding off for years about the risk of error in manual expense reporting — and the financial consequences it can impose upon businesses — the latest findings from the GBTA’s research arm, the GBTA Foundation, suggest that the market’s T&E practices aren’t improving.
According to researchers, in addition to 3,000 hours spent every year by companies across the world correcting expense report errors, that effort is costing these businesses half a million dollars. Today, the average expense report for a one-night stay at a hotel costs $58 to create. But nearly 20 percent of these reports contain an error or missing information, researchers said, meaning it costs an additional $58 and 18 more minutes to fix.
[bctt tweet=”3,000 hours are spent every year by companies correcting expense report errors.”]
For the corporation as a whole, this, of course, poses a problem. But for each individual employee, GBTA found that workers are finding their own T&E-related challenges.
For example, nearly 20 percent of corporate travelers have to create an expense report without help from a third-party software. Nearly half (49 percent) said that doing so is a “major pain point,” while other sources of friction cited were data entry and attaching receipts.
A Different View
The research and analysis conducted by GBTA was on a global scale, so the company was able to assess their findings from multiple vantage points.
In breaking down findings based on geographical region, analysts found that corporations across North America and Asia Pacific use a third-party T&E management software solution more than their counterparts in other regions. More than 80 percent of travel buyers in these two areas use such tools, but their peers in Latin America use T&E software services just 60 percent of the time, researchers found.
Travel buyers in Europe, especially Germany, are more likely than those in other countries to submit paper invoices. But that doesn’t mean the rest of the world is ditching paper. Analysts found that across the globe, paper receipts are the most common method of submitting these documents (though especially in Europe and Latin America).
The one exception, researchers found, is in North America, where 84 percent of corporate travel buyers report using scanned receipts and 62 percent report using electronic receipts to attach to expense reports. Even the majority of corporations use mobile image capture to submit their receipts (61 percent).
The Big Picture
According to HRS CEO Tobias Ragge, the research suggests that corporations should be looking at the big picture when it comes to their T&E practices.
“Corporates are often focused solely on the direct costs, for example, the price for flights, accommodation or ground transportation,” he explained in a statement. “However, optimizing the expense reporting process offers a huge potential for savings.”
He added that automation and digitization are two major necessities for businesses to recognize the cost savings that cannot be accessed through manual data entry or paper-based procedures.
GBTA Foundation Vice President of Research Joseph Bates said that with so many more sophisticated options available to businesses that negate the need for manual, paper methods, companies need to move their expense management methods up the priority ladder.
“With the rapid introduction of new financial products in the business travel industry, companies should continually evaluate their existing practices, and business needs to ensure they are working as efficiently and cost-consciously as possible,” Bates stated.