5 Big Benefits of Automating Expense Management

By: Priscilla Kohl
February 3rd, 2011

Many companies today are still manually processing travel and entertainment (T&E) expense reports. If this includes yours, consider how much more efficient it might be to automate that process.

If the image is a little fuzzy for you, let’s consider results from a recent survey conducted with more than 300 companies. A November 2009 T&E Expense Management Adoption Survey from Advisors.com found that, on average, a company spent approximately $28.21 to process an expense report if the process was entirely manual.

By comparison, the survey found organizations with fully automated and integrated systems had per-transaction, expense-processing costs as low as $6.19, a 78 percent decrease.

Additional Employer Benefits
If you’re not slapping your head yet — or, if documented-savings reports aren’t convincing enough — consider the bottom-line benefits that automation technology provides. Among them:

1. Eases employee pain. When top-performing employees are traveling all week — perhaps generating sales and making clients happy — employers should at least support them by minimizing unnecessary distractions. For example, if tardy reimbursement checks cause financial hardships for employees, employers can also expect to see declining morale and productivity issues. This scenario is practically unheard of with an automated and integrated T&E system. Traveling or time-strapped employees also appreciate the convenience of a direct-deposit type of reimbursement, making a trip to the bank unnecessary.
2. Capability to negotiate better deals. Employers can easily run reliable reports and analyze data using automated technology. Employers can then predict a variety of negotiable business costs, which can help put organizations in a more competitive position. For instance, one automated report could confirm that business travelers are regularly using one hotel chain or airline carrier over another. When armed with fact-based information, employers are in better positions to reach cost-saving deals with travel providers.
3. Effectively manage enforcement and compliance issues. Whether workplace policies are dictated by regulatory compliance issues or mandated internally, employers can enjoy a distinct peace of mind that “going automatic” provides. For instance, most automated platforms are programmed in accordance with standard-reporting policies. And employers can also customize features in order to reflect their internally mandated policies. For instance, do you want employees to keep expenses below a certain threshold? Are employees constantly wondering about IRS-allowable mileage rates? Automation technology allows for both customized and pre-populated fields. In short, when employees enter expense items that are out of range or prohibited, the automated system blocks or rejects those entries.
4. Frees up valuable time for management. Managers are expected to lead productive teams. Auditing and manually processing employee reports can become a full-time job. When managers and supervisors spend time shuffling through paperwork, valuable leadership time and synergies are lost. Beyond that, automated approval processes allow for greater flexibility. A manager traveling out of country can approve a Web-based report within minutes of receiving it. Bottom line: A manager’s time is much better spent developing, mentoring and coaching employees, as well as managing projects and relationships. In the end, managers and workers alike can feel more positive, productive and businesslike.
5. Reduces costs all across the organization. Automation has real cost savings says the Society for Human Resource Management (SHRM). A case study SHRM’s article titled, “Automating Time and Expense Reporting,” tells a compelling story. The article describes how Stamford, Conn.-based Thomson Corp. slashed costs and cleaned up a messy process through T&E automation technology. As the article points out, Thomson’s corporate director for cash management “did a survey of corporate users six months after rollout. With the new system, she found, the traveler’s time to fill out a report fell from 30 minutes to 15; the approver’s time dropped from 15 minutes to five, and the accounting department’s time fell from 30 minutes to 15 minutes.”

The Takeaway
Granted, human behaviors don’t always change as fast as technological advances. Changing from a manual process to a fully automated, end-to-end process might seem overwhelming or even threatening. This is why it is very important that employers handle their due diligence and evaluate automation technology vendors based on a proven track record.

The cost-savings and time-saving benefits are indisputable. Even when the U.S. economy fully recovers, employers can hardly afford to ignore controlling travel and expenses, both significant and controllable costs.

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