The TEM (Travel & Expense Management) market today is expanding both in scope and reach. According to the Global Business Travel Association, business travel spending grew globally to $305 billion in 2018 from $292 billion in 2017 - and is projected to grow another 3.1% in 2019. Businesses are exploring technologies to manage, control, and track their travel expenses.
In the coming year, expense management technology will help move beyond archaic methods of expense reimbursement calculation and analysis while merging and evaluating expenses on both granular and macro levels. This will enable companies to keep up with expense management as they grow in scope and scale. The T&E management software market is likely to reach $2.7 billion by 2022 with a compound annual growth rate of 8.7%. In this blog post, we will discuss the various expense management trends seen this year and how they will change in the next year.
Realizing ROI with expense management software
Organizations that have invested in dedicated expense management software have seen positive ROI. With real-time visibility into employee expenses, businesses are now complementing their existing accounting software with effective decision making, policy formulation, and cost-cutting initiatives. Enterprises report that this is further enabling the management and executives to have a clear picture of the total expenses incurred.
In the long run, businesses will be able to improve profits by analyzing employee spending, clarifying spending patterns, and checking policy violations.
Leveraging technology for a seamless experience
Cloud-based systems are removing the need for paper-based processes. Deploying this through a mobile app with smart Optical Character Recognition (OCR) scanning will instantly convert paper receipts to make digitization more seamless.
A digital solution will empower employees by allowing them to present their requests online and claim reimbursements from any internet-enabled device. This will significantly improve employee satisfaction and retention with seamless processing. Invoice approval and settlement of bills occur in less time, more efficiently, and in a cost-effective manner.
With the omnipresence of smartphones and tablets, the increasing number of people managing expenses via the app will make the entire process more agile and effective.
Digitizing expense management in SMEs
Small to mid-sized firms mostly process accounts and expenses manually or use legacy software. Tracking and maintaining accounts of business expenses throughout the financial year can be labour-intensive and tedious for the processing teams within the accounts and HR departments.
There was also a predominant belief system that expense management software was used only by large firms. While corporate giants have always been early adopters of emerging business solutions, the benefits of incorporating an automated expense management solution are now being realized by smaller companies as well.
2020 will see more small and mid-sized companies switching to digitized expense management. These companies might have thought of these solutions as too expensive or time-intensive to adopt. However, this trend is changing with affordable pricing models. For example, they can start automating expenses right away with a free signup on Zaggle Save.
Managing expenses with more holistic software
Expense management systems are becoming holistic in nature as they offer seamless integrations with HRMS tools, ERPs, accounting software, etc. Moreover, open APIs are enabling businesses to make integrations with their own software ecosystem. With fully-integrated expense management, businesses have complete visibility leading to improved decision-making.
Reducing human error and fraud
Manually copying old and faded paper receipts, recovering lost tax invoices, and misplacing decimal points during input are examples of human errors that can prove pernicious to the company. This is further exacerbated when employees manipulate expense data, sometimes filing for exaggerated expense claims and requesting reimbursements. These can be combated with automated web-based solutions with provision for duplicate detection from submitted invoices.
Elimination of fraudulent expense claims is now being done with corporate expense cards for directing transactions such as travel and accommodations, food bills, and other company purchases. With corporate cards, the need to incur out-of-pocket expenses and claim reimbursement later is significantly reduced as every transaction will be carried out through them.
Automating policy checks
Only 72% of companies have a formal T&E policy in place. Policy violation leaves large-sized corporation to lose millions of dollars year-on-year. Manually cross-checking the compliance for every expense line is very labour-intensive and time-consuming and is simply not viable.
The provision of a policy rule-book within the Travel & Expense Management software can help in maintaining compliance within the organization. 2020 will see more adoption of automated policy checks.
Integrating third-party apps
Third-party integrations in Travel and Expense Management software include integrations with hotel and travel booking portals such as MakeMyTrip, Ixigo, Oyo, etc.within the platform and also with local transport providers (Uber, Ola, etc.).
Such integrations will allow for personalized deals and employee discounts under a corporate umbrella. This will enhance the travel experience while making the process smoother.
Driving automation and training
The traditional reimbursement process is long and cumbersome with enormous time gaps between every phase of expense reimbursement.
A robust Travel & Expense Management software will automate the approval workflow, improve the finance-manager connection, and secure the strong-hold of the CFO on expenses. However, a good Travel & Expense Management software needs to be complemented and sustained through its personnel. Thus, proper training is necessary to ensure that the employees understand and are comfortable with the platform. A good UX through a simple and intelligent UI is highly essential to achieve this.
Business travel assists with multiple purposes and influences a wide range of business objectives from reinforcing sales to sustaining partnerships, training, customer service, and professional development.
Businesses including SMEs are now exploring holistic expense management solutions to help them decrease travel costs, improve policy compliance, and streamline and automate processes. But it’s important to be sure of the durability and versatility of the solution prior to switching to digitization.
At Zaggle, we are simplifying business payments through control and visibility over expenses. With a free signup, you can explore our platform, Zaggle Save and start automating expenses for your company. Please feel free to get in touch with us if you would like to schedule a demo or if you have any questions.