Get ready for major reimbursement changes post COVID
With companies finally looking past the COVID pandemic, T&E representing such a large percentage of the average company’s budget, it’s time to think more strategically about expense management processes. That means consolidating reimbursements dollars and processes to make life easier, and payments faster. It also means ending tedious manual expense reporting by implementing an automated process which provides the functionality, accuracy, visibility, reporting, and control required to manage all expenses.
Travel and entertainment (T&E) expense is often considered to be the second- or third-greatest controllable expense for a company, after wages and sales-and-marketing expense. CFO’s and Expense managers who can juggle the right internal and external processes, software, and potential for employee error can save their companies a substantial amount of money. The right investments can go a long way, investing in the right technology that does not overly burden employees is critical.
Streamlining documentation
What about employee error and potential fraud? According to a recent report by Oversight, which analyzed 10 million transactions totaling more than $1 billion in T&E expenses, over 82% of fraudulent activity was made by only 5% of employees. Sometimes employees may not be fully at fault. They may need office supplies, temporary employment services, telecommunications, and other items related to travel. They do not want to pay for these item out-of-pocket, but at the same time expenses for them are considered fraud and misuse. The longer fraudulent activity lasts, the bigger financial impact it has on an organization. Companies are well-advised to detect non-compliant behavior as fast as possible, and without inconveniencing other employees within the travel program.
Thankfully, a growing market of cloud-based technologies can streamline the entire expense documentation, submission, and reimbursement process and dramatically reduce both cycle time and costs. Combined with clear policies and FAQ’s, these systems have the added benefit of reducing the possibility of fraud, intentional or not. Workflow automation reduces the hands-on time required by finance personnel to process reimbursement requests, freeing finance staff time. When adopting an enterprise-wide system, large organizations can customize permissions and allowances for various employee levels and travel destinations. Many electronic workflow systems accept scanned receipts and can be set to flag only outlier charges for auditing, placing the burden of approval back on managers and relieving highly paid accountants of the need to reconstruct a traveler’s paper trail.
Clarifying Policies
Some companies issue corporate credit cards with strict limitations, asking employees to sign up-front usage agreements. Clarifying policies with written guidelines creates a culture of accountability in which employees know what is expected of them, so they can spend accordingly and ensure complete and accurate documentation and compliance. Automated travel booking systems not only move individual charges into centralized systems, they also facilitate extensive data analytics. So, if you want to know which employees thought it was a good idea to charge the company an extra $600 to non-stop, you can run that report in seconds. If you’re curious about how many employees stay in top tier properties, and if any upgrades were charged that information can be at your fingertips.
Companies that establish and communicate clear policies and require and which vendors to use often negotiate discounts and rewards with hotels, rental car agencies, and airlines up-front. The goal of consolidating and automating reimbursement functions goes beyond just saving the company time and money, but to create realistic travel policies that are people-friendly, keep employees honest, and gets people reimbursed faster. Navigating this process isn’t easy but the best companies help their employees do it accurately and efficiently.
