Travel is a necessary part of doing business for many companies. In the United States alone, business travelers took 482 million trips last year, according to the latest findings of the Global Business Travel Association. More trips equal more travel and expense reports, and while booking travel has increasingly moved online, reporting hasn’t. The majority of businesses, large and small, still rely on manual paper-based systems, new research from PayStream Advisors reveals. And that tendency to stick to manual processes could be costing businesses millions of dollars.
The majority (80 percent) of accounts payable teams don’t know or don’t track the price of processing expense reports, according to PayStream’s 2015 Travel and Expense Management Report. The research also revealed that not knowing is costly. In 2015, the amount of manually processing a single expense report will rise 15 percent to $26.63, the study revealed. The same expense report handled through a fully automated travel expense management system, however, costs just $6.85—nearly $20 less.
Multiply those savings by the millions of business trips taken every year, and it’s clear a lot of money is being left on the table by businesses choosing manual over automated. But companies surveyed said they don’t feel the need to change the way they handle T&E reporting, as 29 percent felt their processes are working.
SMEs Lag Far Behind
When it comes to the automation gap in T&E reporting, size does matter. Large corporations are much more likely to invest in travel expense management software than SMEs. Only 9 percent of large corporations still use a completely manual process, compared to 63 percent of small businesses.
What businesses don’t know is hurting them, the research says. When asked why companies do not adopt an automated travel expense management system, top reasons were the lack of ROI on automated systems (15 percent) or the absence of budget (11 percent). But the PayStream report shows reduction in administrative costs alone could cover the cost of transitioning.
When it comes to managing travel policies, companies both large and small struggle with similar issues. The Top 3 concerns of large enterprises are: handling increases in overall travel and expense spending, an inability to enforce existing travel policies, and the hassle of manual data entry. Small business also struggle with controlling increasing costs and the drain of data entry, but the lack of visibility within their travel spending is their main concern. Moving to travel management software does more than just reduce the expense of processing reports. Automation can significantly improve data entry time and spending controls.
The research found that while more than half of reimbursed funds stemming from T&E reports are direct deposited, paper still rules the process.
One of the biggest paper generators in business travel is receipt approval and reconciliation. Automated tools already on the market can directly import and categorize T&E-card purchases, reducing data entry. Employees are increasingly using their smartphones and tablets to capture receipts on the go, and using travel expense management software smartphones can feed transactions for approval in real time to accounts payable teams helping to improve visibility over spending and the ability to enforce company policies.
Efficiency is critical to an effective corporate travel program. The cloud or hard drive space trumps folders filled with paper or spreadsheets when it comes to speed, productivity and compliance. This year the Global Business Travel Association expects businesses to spend $310 billion on travel, topping 2014’s record-breaking spend of $292 billion. Smart money is on those who manage expense reports with a few clicks.