Business travel is a top indirect spend area for many companies and certainly can be challenging to manage efficiently without the right digital tools, according to Amadeus. Today's fragmented approach means adherence to travel policies is irregular, 'on-trip' spend like meals and taxis are rarely managed, and a reliance on manual expense claims burden travellers, finance teams and managers with administrative tasks, it says.
A new era in business travel is now emerging to support hybrid working, with companies focused on how travel can deliver maximum value in this new environment.
End-to-end digital spend management delivers productivity improvements and travel spend efficiencies
CEBR's work highlights the economic opportunities of digitally transforming travel and expense. According to the study, end-to-end digital spend management delivers economic benefits in two primary areas:
Firstly, productivity improvements for travellers, managers and finance teams from digitalising expenses. This could save 147 minutes per expense claim, equating to 188,000 full time equivalent employees and USD20.6 billion in gross economic value across the four economies, the research shows.
The second is direct travel spend efficiencies, which could result in savings of USD31.4 billion or 8.2% of direct travel spend made by large companies across the four markets. Savings are achieved through reductions in fraud and error and more consistent application of company travel policies.
Virtual cards with pre-agreed trip budget key to end-to-end digital spend management
Under end-to-end digital spend management practice travellers are provided with a virtual card stored on the traveller's smartphone and containing a pre-agreed budget for the trip. As such, travellers no longer need to submit expense reports and finance teams also gain efficiencies in accounting, auditing, reimbursement, control, budgeting, forecasting and international VAT reclaim.
Taking fraud, error and out of policy travel spend out of corporate travel
The historic expense and reclaim process, which relies on travellers paying with their own money, enhances scope for fraud, error and out of policy travel spend, says Amadeus, and by replacing employee payment methods with a virtual card for a pre-agreed budget, CEBR's research calculated the estimated USD31.4 billion in annual direct travel spend.
Travel finance professionals believe in economic case for end-to-end digital spend management
In an associated report 'It's time to transform: The economic case for end-to-end digital spend management in business travel' that provides the data behind the assumptions, it is revealed that more than 90% of finance professionals involved with travel believe end-to-end spend management would increase spend visibility.
Almost all respondents also agreed it would decrease the risk of fraud, out-of-policy expenses and overspending in their company (94%), would increase visibility on travel spend in their company (95%), would simplify international VAT reclaim process on travel (95%)
Does company travel and expense policy remain fit for purpose?
The change experienced over the past few years has given companies time to reassess corporate travel programs and how they can best meet the needs of travellers and the business. New trends are frequent brief international trips being replaced by longer stays and internal gatherings of employees that increasingly work remotely. What is clear though is that while the nature of business travel has changed, the requirement to collaborate in-person remains.
Now is "an ideal moment" for corporate travel, finance and procurement leaders to come together to ask if the T&E process at their firm remains fit-for-purpose in this new environment, observes Amadeus.