Attention CFOs: travel expense management needs a rethink and modernisation to ensure compliance and generate business efficiencies

21 January, 2021

Digital transformation is not new, but it is something that is now more central in the eyes of company boards as they realign they activity under economic constraints, developing operational efficiency and flexibility all while many contend with depressed demand. But to be successful, travel technology company Amadeus warns that transforming outdated travel and expense management processes and tools must be central to future business objectives.

The company commissioned Forrester Consulting last year to conduct a survey of finance, procurement, travel management, IT, and HR leaders at large enterprises to explore the current state and challenges with travel and expense management processes and tools.

The study, 'Digital Transformation For Travel And Expense: Balancing Process Efficiencies, Compliance, And Employee Experience', was published in Sep-2020, based on qualitative interviews and a survey carried out amongst 556 respondents. It found that enterprises "must rethink" their travel and expense management technologies to digitally transform, improve employee experience, and enhance efficiency of financial operations through automation and integration.

For the organisations in the study, respondents said the top business objectives over the next 12 months were increasing efficiency in operations (75%), accelerating their digital transformation (71%), and improving the experience of employees (69%). "Modernising travel and expense management is critical to achieving these business objectives," observes Amadeus.

The research highlights that almost three quarters of respondents (73%) agreed that improving travel and expense management processes and tools is a key part of their organisation's digital transformation journey. A similar proportion said that improving such processes are key to reducing cost and increasing operational efficiency (74%) and improving employee experience and engagement (74%).

For many corporate travellers complicated and restrictive policies around making bookings and expense management are particular pain points in their lives. But, they don't need to be. The report highlights these clearly with respondents complaining about "cumbersome, restrictive processes for booking travel that are exacerbated by issues with platforms that do not provide value-add information". For expenses, "lengthy and manual processes for submitting receipts and expense reports" are still top employee complaints.

Right now, only a small percentage of enterprises have an end-to-end cloud-based travel and expense management system in place. Rudy Daniello, executive vice president, corporations at Amadeus says this situation "impedes" the overall business operations. "Legacy systems add manual burden to the workload of employees, managers and account processing teams," he adds.

This is backed by the Forrester research with some companies surveyed saying it takes 13.6 hours on average to process travel and the associated expenses, from booking to reimbursement for travellers, approvers, auditors and accountants.

It is clear there is a high demand for easy and seamless digital tools for employees who do not want long-drawn, complicated paper-oriented processes. It was estimated a few years ago that around one in five travel and expense claims are actually processed wrongly, which takes about 18 minutes to rectify and over USD50 to correct.

"By transforming these processes or adopting modern travel and expense tools, employees can reduce their time spent on long-winded tasks and finance teams can access real-time information to manage payments more efficiently," says Mr Daniello.

Technology is already playing a crucial role as an enabler and accelerator of recovery. Just as vaccines will allow us to start to emerge from the COVID-19 pandemic, technology - if deployed correctly - will help develop a better industry. Travel and expense management is certainly one area where such change could be particularly powerful.