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01 Jul 2014

Forrester research shows that corporate T&E spending is still the problem child

Despite automating T&E processes companies are still struggling to control travel-related spend.

A recent Forrester study, funded by a large US-based expense management vendor, somewhat unsurprisingly highlights the fact that despite automating T&E processes, large organisations are still finding travel-related spend difficult to control. Who'd have guessed?

Despite it's obvious lack of independence, the study does highlight a few  points that we think are worth looking at through the Serko lens.

The research basically calls out two problems with the way organisations manage T&E:

  1. Even in organisations that use an automated system, expenses are submitted retrospectively i.e. the money has been spent before the automated process kicks-in. This leaves companies trying to force compliance after the fact. In reality this effectively means that employees who have spent outside of company policy receive a rap on the knuckles and are encouraged not to do it again, but there’s no process in place to prevent it
  1. Although automated systems have been adopted by many organisations, they still rely on employees to manually enter the initial data. As well a being a time-consuming process, it is also error-prone to the tune of $100mn per year for Australian businesses alone.

Of course, there is in fact nothing new about these two issues - they've been around for ever, but they are difficult to deal with unless you're using an integrated travel and expense management solution. Serko customers that use Serko Online and Serko Incharge have a much better chance of managing the highlighted issues thanks to some clever product integration.

  1. By using the trip pre-approval feature, Incharge customers are able to take control of travel spend before the funds have been committed. Travellers (or their TMC’s) can create travel bookings and submit the itinerary via Serko Incharge to their manager for business approval. The manager can see the exact cost of the trip in advance and decide whether to approve it or not. Even if it takes a few days for the approver to make their decision, the system holds the booking until the displayed expiry time, ensuring the price approved is the actual amount paid. To take control a step further, the system can be configured so that travellers (or their TMC’s) can only create an itinerary from options that comply with their personal travel policy (including flights, accommodation and car hire), so compliance is guaranteed.
  1. Serko Incharge automatically transfers the pre-approved travel data into an expense claim, saving time and eliminating errors caused by manual data entry. As the process is transparent, all interested parties (claimants, travel arrangers, business approvers, and finance staff) can see the status of claims at anytime. In addition, authorised users have access to a wealth of real-time data that can be extracted to produce custom reports from company-wide statistics down to individual user level. The insight provided by these reports can help managers make better-informed decisions on how to optimise travel spend.

The Forrester research ranked T&E expenditure as the second most difficult to control cost after Repairs & Maintenance, so it’s not surprising that organisations are actively looking for good solutions that allow them to get control over the spend category.

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