The new year often brings a desire for improvement. As we are now well underway into 2023, many of us are considering the positive changes we can make over the course of this year – and at Amadeus we are no different.
With this in mind, we have recently been exploring the evolution of travel and expense (T&E), revealing a growing demand for a digital transformation from both employees and corporates. Following the release of a study from Forrester Consulting, commissioned by Amadeus, my colleague Arlene Coyleexaminedthe trend , looking at how new digital tools are being deployed, while asecondpiece examined what this might mean for the employee experience.
Today, I want to refocus, and investigate what the new digital world of T&E, including the shift from expense management into spend management, what this could entail for financial decision makers - and the benefits it could bring.
The Forrester research – which engaged with 525 professionals across various functions at large enterprises in nine leading markets – revealed a number of concerns with the status quo. Manual T&E processes, for example, were singled out as a worry, putting a strain on employees’ productivity. Submitting, approving and processing expenses, as well as reconciling invoices and payments, were also still laborious, the study revealed.
Unclear travel and expense policies were also cited. With companies revamping travel policies to incorporate new requirements - including sustainability and the additional complexity of complying with COVID-19 regulations - many experienced a lack of clarity. More than a quarter of respondents also struggled with a lack of visibility into employees’ location while traveling and an inability to detect and control fraud.
From an employee perspective, across all organizations, the number one complaint was paying travel expenses from their own pocket and having to submit an expense claim.
End-to-end integration
Many of these concerns can be addressed through greater integration of T&E systems into an end-to-end digital solution, digitalized from budget planning all the way to payment and recording – it is here where work remains to be done. Only 52 per cent of survey respondents’ organizations utilized fully integrated T&E solutions in 2022, while 44 per cent used solutions that were only partly integrated.
To build an integrated T&E, each element of the process must first be digitalized, and in this regard some progress has been made. Today, 74 per cent of respondents revealed international VAT reclaim was digitally automated at their organization, while similar numbers said travel invoice reconciliation and the auditing of travel expenses were automatic. Recognition of travel policy violations were automated according to 69 per cent of respondents, while the uploading of receipts and the approval of expenses claims was digitalized at 69 per cent and 68 per cent of organizations respectively.
Digital transformation
While steps have been taken, there remains a need for a wider re-think in the way in which we handle expense management to further drive down inefficiencies. We must move away from an unmanaged, after-the-fact process and instead embrace end-to-end digital budgeting, payment, and expense, only then companies will generate maximum efficiencies, visibility and control over travel spend.
A key to success in this area will be the wider rollout of virtual payments. Indeed, when they considered the functionalities that they value most in an end-to-end travel and expense management platform, virtual payments came top of the list in the Forrester study.
Using a virtual card enables business travelers to directly pay with company money, removing the need to submit an expense form and eventually be reimbursed. This streamlines the whole expense process. The benefits respondents’ organizations experienced also addressed some of the challenges and complaints that respondents reported with their current T&E processes and tools, specifically the inability to detect and control fraud, the lack of visibility on travel patterns that help negotiations with providers and the manual process of reconciling invoices.
Financial decisionmakers also valued functionalities such as automated travel or expense policy violation notifications, automated auditing, and automated VAT reclaiming. Digital systems that removed the burden of manual tasks, including invoice reconciliation and capturing receipts from their email inbox, were also valued.
New solutions for a new year
Nearly three quarters of respondents to the Forrester study noted their companies are expanding, upgrading or planning to buy a single integrated T&E solution in the next 12 months. Many expect to benefit from such a tool. Integrated platforms offer better visibility into departmental spending patterns and an improved ability to ensure compliance with travel and expense policies. Respondents also expected to reduce their firms’ carbon footprint and improve sustainability.
Amadeus is prepared for this change, with our Cytric Travel & Expense solution offering the integrated T&E processes corporate decision makers require. The end-to-end digital spend management solution harnesses a number of innovations to reinvent decades-old travel and expense processes. It presents an opportunity for transformation as well as clear economic benefits gained through productivity improvement and more efficient management of travel spend.
With all spend made using virtual cards and running through the company bank accounts, the process of reconciling payments to bookings is automated. There is no longer a need to audit employee expense reports nor to reimburse the employees. Travelers are provided with a virtual card for a pre-agreed amount, based on the nature of the trip, expenses are controlled in advance. Finance teams can accurately understand travel spend based on virtual card budgets already assigned, rather than trying to estimate the cost of travel at the end of the month.
These are the positive changes we are hoping to make in 2023, offer the end-to-end digital solutions demanded by financial decision makers and improve the T&E experience of the future.
To read the full study - Digital Transformation For Travel And Expense, download ithere
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