T&E Benchmarks: How Does Your Company’s Technology Compare on Handling Travel & Expense Reporting?

Companies in the U.S. spend hundreds of billions of dollars annually on travel and entertainment — and a study from Certify Inc., an expense report software company, surveyed executives and finance leaders to get a snapshot of how many still use manual methods versus how many have upgraded their T&E management technology.

In the study, officials note that travel and entertainment costs can be a significant part of companies’ budgets, which means efficiently managing employees’ expense reports can greatly affect a company’s profits.

Since 2013, the “Expense Management Trends Report: Annual T&E Outlook and Benchmarks” by Certify has worked to help companies of various sizes recognize best practices to consider in travel and entertainment reporting and as methods to benchmark such companies’ current processes against their peers.

This year, Certify said it collected and analyzed responses from 546 chief financial officers, controllers and other finance leaders outside of its customer base.

The 2018 report also outlines the findings of the survey and the expense reporting trends that are expected to have various impacts on small, mid-sized and enterprise companies.

Still Using Pen and Paper?

While companies are beginning to allow their employees to have more say in where they spend their allotted funds, companies also have begun to manage their own expense reporting through the use of various technologies and processes. Some continue to rely on manual methods of reporting, using pen and paper or Excel spreadsheets, while Certify says others are moving toward the use of web-based automation and enterprise resource planning (ERP) systems.

Officials said in the report that each of the many ways in which companies approach their expense report management activities come with their own advantages and disadvantages when it comes to efficiency, employee satisfaction, transparency and control.

In the 2018 report, 49% of companies surveyed said they are currently relying on some form of a manual system, which was a 3% increase from the 2017 report. The survey defines “manual” reporting as any process that uses Excel spreadsheets, pen and paper, in-house systems or any combination of those reporting options.

According to the report, enterprise companies have the highest use of automation, with 39% using a web-based system, and an additional 32% using an ERP system for expense management methods. About 28% of small businesses reported using a web-based, automated system.

“It might be tempting to think that only large companies can justify the cost of web-based automated systems, but many automated systems offer pricing models that are affordable for the smallest of companies,” the report states.

Although manual reporting may be used by companies seeking to maintain familiar costs as opposed to the costs perceived in implementing new systems, the report states that most costs incurred during the expense-processing system are related to the time spent creating, approving and reimbursing expense reports, in addition to the costs added by printing reports and delivering or mailing them to the appropriate personnel. According to the report, additional costs can at times arise due to inefficiencies found within the manual reporting methods currently used.

One such example shows that 53% of small firms, and about half of the mid-sized and enterprise companies, said their finances were affected by employees losing paper receipts or submitting expense reports without receipts.

As some companies shift toward newer technologies, the report said 63% of small businesses that switched to a web-based expense management system minimized or eliminated their use of Excel spreadsheets from their expense reporting methods. Additionally, 43% of enterprise companies said a driving factor for their implementation of automated reporting methods was based on gaining visibility regarding travel and entertainment spending.

More on the respondents

Among the survey respondents, Certify said 39% were director-level or above (CEO, CFO, etc.); 44% were a manager, controller or accountant; and 17% were other types of finance professionals.

About 25% of the survey respondents described themselves as end-users who submit expense reports, with 16% of respondents identifying themselves as managers who approve invoices on behalf of their employees. About 20% said they are accountants who approve and/or reimburse expense reports. A third of the respondents said they report on their company’s expenses.