According to Forrester, T&E ranks as the second most difficult cost to control, right behind maintenance and repairs. The primary culprit for this lack of control (and overspending) is a lack of real-time insight, which is a by-product of manual expense management.
Here are three ways a lack of real-time insight affects companies' ability to handle T&E expense management.
1. Internal resources are forced to take a reactive approach to T&E management
Spreadsheets are a great tool for individual data analysis. What they’re not good for, however, is supporting department or policy-driven analysis.
It’s not just manual data entry that feasts on resources. Companies without real-time systems devote more staffing and IT resources to keeping the systems, policy and technology up-to-date against always-changing requirements, codes and preferences.
Even most small changes require implementation from multiple people who must input data into multiple sources. This isn’t just true of spreadsheets. Forrester’s The Power of Real Time Insight Report shows that 36% of respondents are bound by manual processes even though they have “custom-built” or “homegrown” expense management applications.
2. Less transparency equals less control
When data from corporate cards, expense reports, travel systems, HR and supplier invoices come from different sources, they are not part of a consolidated system that records or triggers T&E costs.
And without a consolidated system, companies cannot fully comprehend spend because they lack the ability to:
- Access real-time reports and dashboards on mobile devices
- Quickly and easily modify these reports
- Import T&E-related data from other sources and vendors
- Resolve merchants and vendors to a unique entry (normalization)
- Distribute reports automatically to those responsible for managing each budget
Real-time consolidated data, combined with accessible, identifiable insights, allows companies to pinpoint cost-cutting opportunities related to specific vendors, suppliers, internal departments and travel bookings.
3. Manual processes do not contribute to policy compliance
Spreadsheets and most custom expense systems put the onus on those who work in finance, HR and travel to enforce policy compliance. Because there’s not a system in place to prevent users from performing out-of-compliance activities (or an automatic process that triggers when exceptions are requested), almost all policy enforcement is done on a reactive basis, after it’s too late.
An expense management system that enforces policy via automation not only prevents out-of-policy spend, but it also:
- Frees up time and increases satisfaction for those who police spend
- Quickly identifies out-of-program spend that was not budgeted
- Identifies preferred vendor opportunities that can cut costs through negotiated pricing. These preferred vendors can be set as the default vendor in the system
- For companies that travel internationally, tax and visa issues are made known upfront. Traveling employees can be tracked and assisted from a single dashboard
- Most companies don’t know if their T&E spend is fitting for their industry or company size. Benchmarking insights helps companies understand the competitive effectiveness of their spend.
Manual processes are not conducive to mobile efficiency. With cloud-based solutions, the entire company has access to the expense management system at all times. Alerts, workflow efficiencies and real-time insights keep T&E spend management running smoothly with up-to-date data.