The travel and expense management industry is enjoying a period of innovative development. Among all of the B2B Software-as-a-Service segments, T&E seems to have implemented mobile, automated and high-tech solutions a bit more quickly than others.
Many of these players are targeting their solutions to the SME business community. But news hit earlier this month that travel and expense management solutions provider KDS secured a massive deal with beverages giant Carlsberg, a multibillion dollar conglomerate that operates all across the globe, with 45,000 employees.
PYMNTS spoke with KDS SVP of Product, Partners and Marketing Oliver Quayle to explore how T&E firms approach the job of managing employee expenses for such a massive company and how gaining visibility into corporate spend down to the individual worker can often have massive implications for these businesses.
According to Quayle, the larger the corporation, sometimes the more difficult it can be for that business to actually see how its money is being spent. “The reality is,” he told PYMNTS, “the challenge they face is getting their hands around what they’re spending their money on.”
[bctt tweet=”The larger the corporation, the more difficult spend visibility can be.”]
This becomes incredibly complex not only with more employees but with more jurisdictions in which those workers are spending corporate funds.
There are an array of ways a company can choose to manage expenses when dealing multinationally, Quayle said. For example, a business may need a fixed foreign exchange rate that is used to convert purchases made overseas back to either the local currency of an employee or the local currency of a corporation for purchases made on a company credit card. Or, he explained, businesses may need a dynamic foreign exchange conversion rate tool that calculates conversations based on the time of purchase.
Key to T&E for these businesses, too, is ensuring regulatory compliance within each territory. For instance, some countries require that physical proofs-of-purchase are kept for reimbursement.
But the challenges in international T&E management can go even further.
“There are other knock-on effects to capturing your spend,” Quayle said. “Managing expenses have other implications; for example, how you count or reclaim your VAT and the accuracy of financial reporting.”
Improper T&E management can steer a company towards tax violations. Even scarier, large conglomerates can run into issues with bribery and corruption if they aren’t adequately overseeing employee spend, Quayle added, noting that even if an employee isn’t using corporate funds for personal gain, they can sometimes be used to sway the actions of other individuals.
“There are far-reaching implications beyond just spend management itself,” Quayle explained. “Travel and expense is normally the third-largest area of spend. It’s difficult to manage that area.”
The regulatory and legal implications of proper T&E management for major corporations are tough, and they land on top of the existing challenges that any company faces in terms of ensuring employee spend is transparent and within corporate policy.
“Managing and controlling spend to make sure it’s appropriate and in policy is absolutely a large challenge for corporates when you consider the volume of expenditure that can run through,” Quayle said.
It may seem daunting, but achieving transparency in travel and expense management is a “win-win” for everyone involved, he added. Employees don’t have to suffer through the “mindless” process of manual expense reporting, and automation ensures workers are proactively reminded of what expenses are in policy and with preferred suppliers.
And for the company, it’s all about being strategic about spend.
“It’s about visibility into spend, because if you know what you’re spending money on, you can manage your supply negotiations and get better prices, drive down costs and be more efficient with the things employees spend company money on,” Quayle said.