With travel bans in place and work-from-home orders implemented, business trip volume has all but plummeted to zero. That may initially seem like bad news for corporate travel and expense (T&E) management providers whose revenues are largely comprised of spend that occurs during business trips.
But while corporate travel spend is down, expenditure across a range of other categories is up — way up, in some scenarios, according to Webexpenses CEO Adam Reynolds.
In a recent conversation with PYMNTS, Reynolds explained how corporates have reallocated their employee and company spending volumes in a remote working environment and discussed how the current climate is likely to encourage many businesses to not only embrace expense management automation, but rethink their supplier partners as they look to optimize spend in a post-coronavirus pandemic world.
It's undeniable that travel bans and social distancing requirements have had a negative impact on many organizations within the travel and hospitality industry, and have consequently lowered corporates' spend on business trip-related activity. But, as Reynolds noted, this doesn't mean business expense volume has disappeared.
"We have seen a global reduction in travel, and we have seen some industries affected," he said. "But what we've also seen [is] that counterbalance within our client base by organizations that have actually increased usage of our platform."
Some firms, particularly those in the healthcare, manufacturing, education, technology and construction arenas, are experiencing an uptick in expense volume on the Webexpenses portal, he noted.
"The other thing to keep in mind is that travel makes up a component of expenses, but not all of them," continued Reynolds. "So, what we've also seen is some organizations increase their usage because a greater amount of people are now working from home."
That means a higher volume of expensed employee transactions related to technology purchases or telecommunication services, for example, with professionals unable to use the resources that are traditionally at their disposal when at the office.
As in many back-office processes, manual management of expenses, whether it be in the form of employee expense reports and receipts, or invoices received from suppliers of various services, introduces headaches for finance teams. In a work-from-home environment, the manual strategy is unsustainable, particularly as managers and the C-suite have less oversight into how employees are spending company funds while working remotely.
"Anyone using a manual system will undoubtedly find it more challenging to get that view, pull together all of that information and consolidate it," explained Reynolds. "It's also harder for the claimant," he added, noting that employees used to handing over paper receipts and expense reports won't easily be able to adjust.
As a result, organizations today that are reliant on paper and Excel spreadsheets are quickly moving to digitize, with spend and expense management becoming a larger component of firms' overall digital transformation strategies.
And while many businesses have been unwillingly forced into this accelerated digitization journey, they're also quickly recognizing the opportunities that exist in reducing the paper workload, with consequences that go beyond automating invoice processing and employee reimbursements.
Embracing The Technology Mix
Automation technology is essential to optimizing expense management, but it's an area of the back-office that requires a unique mix of a wide variety of technologies. For Webexpenses, that means combining optical character recognition (OCR) to capture data from receipts and other documents, mileage tracking, payments integrations, policy compliance tools and more, all augmented by machine learning (ML) and artificial intelligence (AI).
This mélange would be difficult for any organization to implement on its own, so according to Reynolds, in addition to businesses scrambling to digitize, they're also searching for the right technology partners that can provide this technology and guide them through the implementation and management process both during and after the pandemic.
In the wake of the volatility, he said, businesses will come out the other side understanding that they do not want to again find themselves in a position of being incapable of adjusting to a remote working environment.
"We'll also see big organizations desperate to achieve economies of scale," he said. "To do that, there will be a focus on allowing systems to be in place to reduce overhead, time and effort that isn't necessary to the job. We'll also see, as part of the digital transformation, organizations [looking] at their suppliers and questioning whether they provide the best value for money."
This not only means evaluating the providers that end up on spend reports; it also means evaluating which expense management providers themselves are best suited to help businesses achieve optimization and value. As such, said Reynolds, while technology and automation are essential, they're not the only factor in chief financial officers' minds today.
"This is an opportunity for smaller suppliers to expand their customer base based on technology and good customer service," he said. "People expect good customer service — it's not just about the technology."