Simplify employee expenses by eliminating manual processes

Expense management software is easier to use than ever before, and it's continuing to advance further every year. Even with these advancements a large number of companies, 57% to be exact, cite poor visibility into T&E spending and compliance as their top business pressure.

Webexpenses is pleased to partner with the Aberdeen Group on this recent report that will review how far along companies are when it comes to their ability to have effortless expense reporting, and the areas that organizations need to improve upon to get there.


By Bryan Ball, Vice President, and Research Group Director, Supply Chain, Global Supply Management, and Retail

Anyone who has ever traveled on company business has at least one story to tell about getting their expense reports in on time and the circumstances surrounding it. What if the process was painless, the surrounding hoopla of scanning and submitting hard copy receipts was eliminated, and the timing was instantaneous; with no delay so that reimbursement happened weekly? Sound too good to be true?

Enter: the effortless expense report that writes itself.

How close are companies to really achieving the expense report that writes itself? The short answer is, closer than you might think. The capabilities to enable effortless expense reporting exist today, but not everyone is equipped with all of the necessary pieces to make it happen. Essentially, the concept is that all of the expense information required for an expense report would be captured at the source of the traveler’s transaction and no further input would be needed to create the report. Other than the approval and settlement process the expense report would write itself. In order to achieve effortless expense reporting, there are three main expense report components to consider:

The travel booking system where flights, hotels, and major travel movements are reserved

The travel card system that captures all chargeable transactions at the point of execution, such as meals, admission fees, etc. All paper digital transactions not captured on a corporate card or from the travel booking system and other paper transaction receipts that are captured with mobile application using OCR (optical character recognition technology)

This report will examine the T&E expense management capabilities and technologies companies have in place that enable them to have effortless expense reporting, and the areas of improvement needed to achieve this goal.

Business pressures: Issue validating and parallel requirements

Let us first review the business pressures that companies are facing when it comes to T&E expense management, and explore how they relate to effortless reporting.

Survey results: Greatest T&E Business Pressures

The biggest priorities of improving visibility, gaining control, and reducing expense processing would fade away if the expense report could write itself. For that to happen, there are key strategies and capabilities that companies need to employ, while also addressing their business pressures.

What Would it Take and Where Do We Stand?From an overall T&E expense management process perspective, in order for effortless expense reporting to occur, the key is to capture information at the source and integrate the data capture with the company’s T&E expense management system and back-end expense management technologies. We will review each of these steps and the degree of process completeness that companies currently exhibit.

Capture at the source
Capturing the information at the source is essential to facilitating the effortless report. The core concept is that once the source capture occurs, there is no reason for the traveler to ever touch it again. Instead, the data would seamlessly flow through the process from one of the three forms of source capture to a line item on the expense report, through integration with the T&E expense system, and then into the enterprise accounts payable or corporate expense management system for settlement. Figure 2 provides a view of the current adoption of source capture, for the Best-in-Class compared to All Others, for the big three components of T&E expenses; travel card, travel booking system(s), and paper capture (see below for Best-in-Class definition).

Best-in-Class Definition
• Best-in-Class is the top 20%
• Industry Average is the middle 50%
• Laggards are the bottom 30%
• All Others are the sum of the Industry Average and Laggards - 80%

Source Capture ability currently in place for T&E

Any gap in capturing all three of these key components will require some manual input by the traveler in order to complete the report. As figure 2 indicates, while there is a lot of work to be done before all companies have an expense report that can write itself, some companies are almost there based on their source capture data capabilities.

Travel or corporate card source capture allows businesses to track any transactions that are made on a travel or corporate card, and feed this data into an expense report for the card number. The Best-in-Class are 47% more likely to have this capability in place and have a very high adoption rate of 83%.

The travel booking system is the second most widely adopted information source capture. The functionality captures any large ticket expenditures like air and hotel that are booked in advance. The booking and invoicing would trigger an update on the traveler’s T&E expense report. A potential obstacle for companies to address is if there is more than one travel booking system that needs to be incorporated as part of the process; this is particularly true for global customers and companies involved in recent acquisitions, where more than one system is considered the standard.

The biggest challenge in expense source capture is the paper receipt. Mobile applications, while least widely adopted, are an important capability to help alleviate the weakest link in source capture. A snapshot of the receipt can be captured on a mobile device equipped with OCR (optical character recognition) technology and converted to a line item on the expense report; just like a source capture from the corporate travel card or travel booking system. There may be some translation challenges from photo to digital, but from the traveler's perspective, mobile completes the source capture and can turn the receipt into an expense line item. Another important feature of mobile is the ability to make changes “on the fly” while in transit. The Best-in-Class are only at 16% in their adoption of this capability, but even at that, they are still 46% more likely to have it in place than All Others.

Source capture capabilities for travel cards and travel booking systems are widely adopted (with over 50% adoption for All Others in each category and over 75% for the Best-in-Class). The emphasis needs to be on getting the mobile applications for paper source capture in place in order to achieve widespread adoption of the effortless expense report that writes itself.

T&E Solution and Source Integration Capability
The source capture of information is essential, but that's not the end of the discussion in order to have an expense report write itself. The next step in the enablement process is the seamless integration of the source capture into the T&E application, so no manual intervention is required. In Figure 3, the integration capability is broken down by the three source capture modes; card, travel booking system, and mobile. Compared to source capture adoption, source capture integration for travel card and travel booking systems is less prevalent. However, mobile integration is significantly higher, indicating that businesses are preparing for mobile input even though the source capture applications are not as widely available in the field for travelers.

The more integrated the solution is with the source input, the better the visibility and transparency will be across the company for T&E.

End to end T&E Survey results

Integration of T&E Expense Management with Enterprise Expense Management Applications

T&E expense management integration within the enterprise expense management back-end solution comes in many forms. Figure 4 provides a look at the many forms of connection and in every case the Best-in-Class are at least 60% more likely to have adopted the solution. On the other hand, the competition is still using some combination of manual input and spreadsheets for expense reports; there appears to be no wide adoption of any one particular approach by All Others.

The connected approach can be a standalone end-to-end solution that is integrated with accounts payable (A/P) or integrated with the ERP system. In some cases, to a lesser extent, the T&E solution may be part of a broader financial suite. The most widely adopted approach is an end-to-end T&E expense management solution; the Best-in-Class are 142% more likely to have this type of solution in place.

Survey results: Incorporation of T&E with Enterprise Expense Management

The integration of T&E with other enterprise applications completes the expense report process through to the approval and settlement phase of the report, which provides visibility and transparency throughout the entire report cycle. With this integration, the effortless expense report that writes itself solves the primary issues of lack of visibility and expense report processing costs as a result of the end-to-end transparency and automation.

Strategic Actions to Address the Weakest Link
As we have seen, many of the capabilities already exist to enable the effortless expense report that writes itself. However, it is clear from the research that the source capture of paper receipts is the biggest drag on making the process effortless. Figure 5 shows the strategic actions that companies are taking to improve the weak link.

Strategic actions to improve paper receipt capture

Equipping executives with mobile applications for faster and simpler processing of T&E expenses is definitely a step in the right direction. Given that only 16% of the Best-in-Class currently have this capability, this strategic action will more than double the amount of companies that have equipped their travelers with mobile travel applications. However, in the quest to increase the level of the effortless expense report, the level of mobile enablement will need to gain greater traction as a priority.

Summary of Key Current Capabilities for "Write Itself" Reporting
Table 1 shows the key capabilities that are already in place to support the effortless expense report that writes itself.

Key capabilitites of 'write itself 'expense reporting

As these key capabilities show, companies are well on their way to addressing or supporting the evolution of the effortless expense report that writes itself. The integration of the major spending components, the travel card, and the travel booking system, will capture the highest percentage of aggregate spend, but not at the individual report level. Once the "write itself" ability is in place, companies should roll-up of all of the individual reports to provide complete transparency and visibility down to the most granular level; the T&E expense source as well as the individual traveler. That level of transparency will have a positive impact on improving compliance, providing visibility where non-compliance issues are occurring most often.

It is encouraging to note from Table 1 that, for those that are mobile enabled, there is a high percentage of companies that have digital receipt imaging to enable the source capture of all paper receipts. The "on the fly" capability for those who are mobile enabled is not as widely adopted, but roughly two-thirds have that capability. The strategic action of improving mobile enablement will be a key factor in the growth of the effortless expense report that writes itself.

Current T&E expense management capabilities aim for two parallel objectives, which are quickly converging. The first is gaining visibility and managing the overall total T&E expense. The second is facilitating the effortless expense report that writes itself, which not only simplifies the traveling process and creates more productive travelers, but will ultimately provide companies with all of the transparency and visibility they desire once it is in place.

Key Takeaways
The ability to create the effortless expense report that writes itself is not as far away as most might think; some companies have or are very close to having that ability now. The biggest hurdle for most companies is to overcome the source capture of paper receipts via mobile applications. The following recommendations provide a guide for the key steps to success for creating the effortless expense report that can write itself for each maturity level.

Recommendations for All Others:

  • Adopt a travel card program to enable source capture of chargeable expenses
  • Adopt a travel booking system(s) to enable source capture of all pre-booked travel such as flights and hotels; currently significantly behind the Best-in-Class
  • Improve mobile applications to enable source capture of paper receipts; this is the biggest shortfall for all companies
  • Improve integration between travel cards and the T&E expense system
  • Improve integration between the travel booking system and the T&E expense system
  • Improve integration for mobile applications for digital imaging and "on the fly" connectivity to travel booking systems; currently significantly behind the Best-in-Class
  • Significantly improve integration between T&E expense management and enterprise back-end systems for whatever approach is taken; currently significantly behind the Best-in-Class
  • End-to-end T&E expense management system
  • Integration with A/P
  • Integration with ERP
  • Use the system available if it is part of a larger financial suite
  • Increase mobile enablement and improve application availability and integration with the T&E expense application
  • Eliminate spreadsheets by adopting a formal T&E expense management system
  • Prioritize and address integration issues by tackling the most manually intensive processes first

Recommendations for the Best-in-Class:

  • Complete adoption of a travel card program to enable source capture of chargeable expenses
  • Complete adoption of a travel booking system(s) and address any global issues across multiple systems
  • Improve mobile applications to enable source capture of paper receipts; this is the biggest shortfall for all companies
  • Complete integration between travel cards and the T&E expense system
  • Complete integration between the travel booking system and the T&E expense system, and address global issues where multiple systems might be in play
  • Improve integration for mobile applications for digital imaging and "on the fly" connectivity to travel booking systems
  • Complete integration between T&E expense management and enterprise back-end systems for whatever approach is taken; already a significant advantage over the competition
  • Increase mobile enablement and improve application availability and integration with the T&E expense application
  • Prioritize and address integration issues by tackling the weakest link in the 'writes itself' capability

For all companies, the best advice is to establish the goal of achieving the effortless expense report that writes itself. It's not as far away as it sounds.