The new shape of business travel is here, so why are some still using rigid expense management systems?

10/10/2023 By Asaf Hanegby, CPA, Director of Finance for Mesh Payments

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Pre-pandemic, T&E spending represented a significant portion of a company’s discretionary budget. As business travel rebounds to pre-pandemic levels, finance leaders must leverage this window to reassess, re-evaluate, and re-imagine travel and expense management processes and strategies.

Business travel isn’t going anywhere. Remote work will make sure of it

A poll released by the GBTA earlier this year shows three in four travel managers expected their company to make more business trips in 2023 compared to 2022. And those predictions have certainly rung true.

A Deloitte study shows travel spend in the U.S. and Europe will surpass half of 2019 levels in the first half of 2023. McKinsey says travel and tourism GDP is predicted to grow, on average, at 5.8% a year between 2022 and 2032, outpacing the overall economy’s growth at an expected 2.7% a year.

Business managers and leaders overwhelmingly agree that travel is a growth opportunity — a survey by Mastercard shows 88% of travel decision-makers think business travel is “critical for driving our organization’s growth.”

Despite some organizations implementing back-to-office mandates, 90% say their hybrid or remote workforce will significantly increase the amount of business travel their organization does over the next 10 years.

Efficiency is king in all aspects of business — including travel

If the pandemic taught us anything, it’s that technology is the key to improving efficiency across the board — and travel is no exception.

Real-time expense automation is the future. According to Mastercard’s survey, 89% of the travel decision-makers surveyed said dynamic T&E policies are needed to navigate the future of business travel, 88% said dynamic tools for travel spend optimization and 88% say end-to-end tools for travel and expense management.

Over nine in 10 say technology that provides real-time alerts to track budgeting and unnecessary expenses on business will either be commonplace or a differentiator within five years. A nearly identical amount (89%) says the organizational ability to track spending in real-time will be commonplace or a differentiator in the same timeframe.

However, not all business travel management tools are created equal

Although businesses agree that automation is the future of T&E, many teams are still struggling with incumbent systems that don’t solve travel pain points. And with travel costs amounting to up to 25% (sometimes more) of a company’s expenses, managing travel spend in a separate system from other corporate expenses is disjointed, tedious,

62% say providing employees with real-time visibility into their spend is a challenge today, 59% say automating travel expense reporting is a challenge today and 45% say their travel and expense reporting process is highly manual. A third (33%) of organizations say they still expect employees to use their personal cards to book travel, which limits the ability to monitor and track those expenses in real-time. (Mastercard)

Finance teams must ensure their organizations are utilizing the best technology available. As with any technology decision, the choice should consider factors such as the needs and size of your organization, the platform’s features, integration capabilities, and customer support.

Mesh Payments recently launched travel management capabilities for its Travel and Expense Management platform to tackle the gaps in legacy platforms head-on. It delivers the only complete solution that works with multiple travel management companies (TMCs), to accommodate regional needs, and is integrated with corporate cards, automated travel policy enforcement, and robust AI-enabled expense management tools.

Armed with compliance-friendly and easy-to-provision corporate cards, employees don’t have to bear the burden of travel costs and reimbursement, and finance and travel managers finally get a real-time, full-spectrum view of the company’s travel spend.

As the world readjusts to post-pandemic realities, businesses must embrace T&E automation. Doing so will streamline operations, reduce costs, and enhance the employee experience — a win-win situation for everyone involved.