How Killing the Expense Report Saves Corporate Travel

Mar 21, 2024

Drawing a direct line to return on investment (ROI) in corporate travel is not always perfectly straight.  In many cases, demonstrating the value of preferred supplier relationships versus the spot market can be hard to benchmark.  Policy compliance and duty of care implications are seemingly intuitive but hard value is not necessarily forthcoming.  Travel is fraught with data inconsistencies and is the sole business function that is so personal that value sometimes lies in the eye of the beholder.  Still, an experienced travel manager can certainly demonstrate ROI for a well-managed program and should be thinking about how cost savings associated with travel optimization dovetails into efficiencies with expense submission and reimbursement.

Expense Automation is a No-Brainer

Travel and expense goes hand in hand.  After all, most expense items are travel related and studies have shown that automating travel expenditures into expense tools drive cost savings.  A Global Business Travel Association (GBTA) study conducted in 2022 reported key statistics that help build a solid case for expense automation:  average of 20 minutes to complete a manual expense report, $58 cost to manually process a single report, and 19% error rates within submitted reports with a $52 cost to fix.  If we consider employee time spent on each submission, involvement by finance to review and approve, and the cost of mistakes or fraud, simple math paints a picture that many expense companies claim drive efficiencies by 40% or more through automation.  

The Problem with Expense

Today, expense companies offer a variety of ways to automate the expense process.  Travel Management Companies (TMC’s) can facilitate the process through third party online booking tools, some content suppliers including air and hotel can automate expense receipt population through a direct connection via a user’s loyalty account or corporate payment solution, and some credit card companies can populate expense reports and aid in data reconciliation.  In a lot of these cases, the result is clean data populating expense reports along with the added benefit of providing meaningful and actionable data for travel analytics in support of a company’s travel program.  

However, most studies including our own client data at CapTrav shows that approximately 20% of airline bookings are made outside of channels that can automate the expense process as described above.  50%+ hotel bookings are typically booked outside of these channels.  Rail and rideshare are also not typically included.  And lastly, automation around hotel bookings typically require user input to attach a folio to include actual spend data and line-item data such as taxes, amenities purchased, and other surcharges.

A combination of expense submission processes as described here still yields some of the inefficiencies that were intended to be mitigated.  So, while the benefit of expense automation remains intact, optimization is still elusive.  

Expense Automation is Vastly Under-Utilized

In many organizations, the travel and finance functions are arm’s length.  They shouldn’t be.  Category owners for travel rely on TMC reporting to optimize the functional areas associated with travel including preferred supplier negotiations, management reporting, duty of care, sustainability, and more.  Yet, the data available is insufficient as most travel category owners can only see that portion of travel that is going through the TMC.  

Expense data should be a panacea for travel category owners.  After all, every single traveler booking ends up in expense for reimbursement.  Unfortunately, most expense processes take a minimalistic approach – enable the user to input the bare minimum of data required for expense purposes.  Aside from automation directly from the TMC, online booking tool, or direct connection to a supplier most expense submissions suffice for purposes of reimbursement, but the resulting data are generally useless to the travel program.  The arm’s length relationship between finance and travel can be blamed even though most travel category owners scream for better travel data to support their programs.  Even for programs that require better data for expense submission, the data integrity and normalization across disparate sources (TMC, card, direct connect) is lacking and without this key ingredient, travel is unable to leverage this important data resource.

Travel and Finance in Harmony

Historically, even well-run travel programs suffered from lack of data access due to non-compliant travelers.  Most would not acquiesce to the idea that they’d never be able to reign in travelers who insisted on booking on their own, typically through supplier websites.  Today, content fragmentation and the very real and advertised reality that in some cases travelers can find better fares on supplier websites has forced most category owners and TMC’s to recognize that 100% program compliance is a fool’s errand and may not even be in the company’s best interest anymore.  

Aggregating, normalizing, and automating travel expenses no matter where or how a traveler books enables finance departments to maximize the ROI initially sought when automating expense while providing travel the best possible picture into travel data for program optimization.  This strategy was the genesis behind CapTrav and why we created the solution.  While most expense solutions focus on the needs of employee reimbursement only and most travel solutions are limited to those bookings made through the TMC of record, CapTrav realized that valuable data analytics should be coming directly from expense and, in fact, expense may be the only place to marry travel data with other organizational data points that will enable smarter business decisions generally.

Killing the Expense Report is the Home Run

Technology has advanced rapidly.  Yesterday’s intriguing capabilities around expense automation are becoming today’s opportunities around higher level machine learning capabilities that take the guesswork out of expense submissions.  Today’s applications enhance the cost savings opportunities that expense automation originally promised.  Aggregated and normalized travel data can be automatically benchmarked against any number of sources including historical company travel data and approved or rejected without any human interaction whatsoever.  In some cases, new technology applications can look at line items and apply rules to each, reimbursing automatically for those which pass and rejecting for inspection for those that don’t.  Some technology solutions can audit expenses at the point of sale, enabling a kind of pre-trip view that may aid in reshopping or even fraud.

An end to end solution, from procuring travel from any source to automating expense and reimbursing travel has been the goal amongst travel visionaries for years.  Today, it can be a reality and the timing couldn’t be better.

 

Brandon Strauss

Brandon Strauss

Co-Founder

Brandon’s career initially focused on supply chain management consulting for mid-market organizations.  Brandon was fortunate enough to get introduced to some senior executives at WorldTravel BTI (BCD Travel) and helped create and manage the first end-to-end self-service booking platform for the company and the first generation of such service in the industry.  Over the last 17 years Brandon has served as a Partner, head of consulting, and co-founder of KesselRun Corporate Travel Solutions, a leading corporate travel consultancy and in 2018 co-founded CapTrav where he currently serves as President of the company.

CapTrav is the market leader in comprehensive corporate travel data capture. Because we collect all corporate travel data no matter the booking source, your program enjoys the ability to better leverage supplier deals, make smart business and policy decisions, and track all travelers in the event of an emergency.