Business travel impacts a wide range of objectives including sales and partnerships for enterprises today. With increasing business travel, there are more bills, expense reports, and reimbursements to deal with.
Whether you follow the paper-based system or a computer-based application, expense management requires collection of all related invoices and receipts to make the right analysis. Travel and expense management today has grown over the last several years to give rise to an intuitive system capable of managing the entire process. Here we are going to explore the five maturity stages of the evolution that travel and expense management has gone through.
1. Paper-based Expense Reporting
While still in use by certain companies, paper-based reporting was where it all started. The growing popularity of spreadsheets led to the creation of specific expense reporting templates by office managers and financial departments. With a fairly simple learning curve, this was a practical option.
This would mean that personnel would manually enter expenses, put together all the required sheets with invoices and receipts, and turn them over to the finance team to process the reimbursement. Further, this requires manual storage of receipts and reports. Also, it is extremely ineffective when the business scales leaving a lot of scope for manual error. This only works if there are a limited number of travellers and a very small budget allocated for the same.
2. Automated Travel and Expense Management
When a firm realizes the limitations of maintaining a paper-based expense management system, they usually move to an automated system. One of the major advantages of this system is that it integrates with the existing accounting and financial software. It requires manual input of expenses whether in the form of data or through photos and PDF files.
With an automated travel and expense management system, accuracy is highly improved leading to a significant efficiency improvement. This further boosts productivity and staff morale with the reimbursements being processed faster.
However, such a system is not customized for travel and the accounting team is responsible for travel expenses.
3. Purpose-built mobile/cloud applications
This allows employees to effectively account for their travel and expenses on-the-go in real-time using mobile applications. This reduces the pressure on employees by allowing expense tracking while travelling.
The system generates automatic reports with the data being synchronized simultaneously. This eliminates the need to report expenses until the employee is back at work. This works for a large corporation with several employees travelling regularly. Such a system delivers an effortless user experience while increasing end-to-end visibility over corporate spending. This significantly improves spend efficiency.
However, this system assumes that the employees are fairly tech-savvy. In addition, for such a system to work seamlessly, it needs to be integrated with the existing financial software. Most importantly, the implementation of a purpose-built system requires clear travel policies and the availability of travel managers.
4. Platform Ecosystem
A platform ecosystem is based on the self-service approach. This is highly useful when there are a large number of travellers. This offers a major advantage in eliminating unsafe bookings through unapproved sources. Additionally, the provision for real-time expense tracking and approval provides end-to-end visibility. Automating expense management makes the reimbursement process faster.
There is plenty of room for third-party integrations. The travel and expense management software can be expanded to include Visa, mobile roaming, and VAT services. With special rates from vendors, there is an unprecedented opportunity to make travel much more cost-effective through the identification of novel cost-saving opportunities.
However, there is a very steep learning curve in using the system effortlessly.
5. Intelligent/Predictive Processes
Cognitive software provides predictive services to travel and expense management systems offering a chance to mitigate unplanned expenses. As with intelligent systems, data drives the game.
With smart reporting and automation, this is ideal for large corporations with frequent travellers and correspondingly a massive volume of data to analyze. This is highly useful in a situation where it is imperative to identify fraudulent reports and errors within reports.
An intuitive system handles the labour-intensive, time-consuming tasks that are usually handled by travel managers allowing them to focus on strategic priorities. This system drives smarter financial planning.
However, there are a limited number of such solutions available in the market.
The road ahead
With the requirements of firms changing, a customized travel and expense management solution is not too far off. An all-in-one solution wired for your firm’s specific needs and capabilities is highly useful.
Such a system is capable of integrating with existing APIs while providing a safe and secure cloud infrastructure to transfer sensitive financial information.
Get started today
Often, business heads are hesitant to make investments into expense management due to time or budgetary constraints. But there are solutions tailor-made just to cater to these needs. An all-in-one expense management software like Zaggle Save that is completely free to use and can also empower your business to spend smarter and subsequently reduce time and effort. Sign up for free today.
At Zaggle, we can help you leverage advanced technologies like OCR (Optical Character Recognition), AI fraud detection and mobility for efficient cash flow eliminating the need for time-consuming, labour-intensive paperwork. With real-time expense reporting, smart scan and multiple other features - enterprises can effectively handle various facets such as Travel & Expenses, Business Expenses, Petty Cash, Expense Reimbursements and Employee Benefits.
Travel & Expenses, Business Expenses, Petty Cash, Expense Reimbursements and Employee Benefits.