Madanjit Singh, Managing Director, South East Asia, SAP Concur
Business travel is a familiar routine for many employees, whether it is to seal a deal or manage overseas operations. However, ask any business traveler and most will agree that expense claims are one of the most dreaded things upon return. For finance departments, managing travel & expense (T&E) claims and ensuring compliance can be an administrative burden.
Yet, business travel is on the rise due to the rapid expansion of economies and cross-border business operations. Globally, business travel spend is projected to top US$1.7 trillion by 2022 according to the Global Business Travel Association, with the Asia Pacific region accounting for 40 percent of global business travel spend.
For many organizations, T&E represents the second most difficult operating expense category to control, and yet forms a significant portion of annual budgets. Given the growing costs of business travel, keeping these low and having greater visibility, control and ensuring compliance for a booming T&E segment is a priority.
But this is no easy feat for the finance department. While departments such as HR and sales are already benefitting from technologies such as the cloud to enhance their operations, finance departments still lag behind through the use of paper-based processes and outdated systems to manage T&E.
The solution is for the finance department to go ‘smart’ and adopt these technologies. Although this is a quick-win, organizations need to shape their technology adoption strategy with insights from the emerging business travel trends that are impacting T&E today.
Business travel redefined
Managing T&E compliance expands beyond handling paper receipts and ensuring timely and accurate claims submission. Travel policies today are increasingly being redefined by a growing proportion of younger workers, who bring with them a new set of needs and expectations around T&E and business travel. Many gravitate towards experiences that are as intuitive and tech-savvy as with what they are accustomed to.
For companies that are largely reliant on traditional travel providers and facsimile booking confirmations, the surge in out-of-policy bookings by employees via third-party travel providers such as Uber or Airbnb can be unsettling.
Finance departments still lag behind through the use of paper-based processes and outdated systems to manage T&E
Though these offer convenience to travelers, the lack of integration of third-party travel vendors within company travel policy creates challenges in compliance and can result in unexpected costs, higher risk of fraud and inability to forecast spending. Additionally, these hinder companies in fulfilling its duty of care in the event of geo-political and security risks such as political uprisings and terrorist attacks, as companies do not have visibility of their employees’ whereabouts.
In the same vein, ‘Bleisure’ has seen a 45 percent jump in bleisure trips between 2016 to 2017 alone according to SAP Concur T&E data, as travelers seek to combine business trips with leisure. Although bleisure allows employees to make full use of their journey and experience another country themselves, companies need to be mindful of how business and personal costs will be segmented and tracked, and the related duty of care for employees while abroad.
Navigating T&E compliance
A key hurdle to managing T&E spending and compliance is that a significant portion of business travel is still facilitated by employees themselves, in the form of bookings or overseas expenses. Getting firm control over T&E requires finance professionals to focus on making processes more efficient and user-friendly for employees.
Leveraging on technology can help to automate and simplify the claims process, not to mention make it more accessible for employees to track and log their expenses on the go. For example, employees can use their mobile to take a photo of their receipts and upload it instantly, eliminating the hassle of processing them weeks later back in the office.
T&E platforms and expense tools also allow businesses to create a network of travel providers, enabling employees to capture all their expenses on a single platform even if using third-party vendors such as Uber.
The process of tracking and managing claims thus needs to be a seamless, user-friendly experience, as intuitive as using a phone. Manual, paper-based claims submissions might prove cumbersome to the tech-savvy employee and room for errors and mislabeled claims.
Ensuring a seamless user experience leads to greater participation and adoption among employees, and in turn improves compliance. An integrated platform also allows finance teams to manage expense, travel and invoice in one place via the cloud for real-time visibility over spending.
Lastly, it is crucial to get employees, as the end-users, on board and ensuring that current travel policies are still suited to the needs of employees.
Ensuring T&E compliance is not only essential on the legal front but also for the organization’s financial health and wellbeing of employees. If companies are able to adapt to the evolving business travel landscape and adopt the right tools, T&E will become a smooth process for both the employee and finance teams.