A compliance crackdown appears to be underway as
corporations use reporting, technology and auditing tools to scrutinize travel
expenses, according to the 9th annual Business
Travel News Expense Manager Survey.
Nearly 70 percent of 168 travel buyers surveyed from
December 2011 to February 2012 said they had reviewed or tightened expense
policies and systems. Three in five said their organizations had deployed an
online expense reimbursement system, while more than half said they had
increased expense report auditing or equipped more employees with corporate
cards. For each of the following, more than a quarter said they had upgraded to
a new online expense reporting system, refused to reimburse or offered partial
reimbursement of noncompliant expenses.
[Please click here to view the digital edition of the 9th Annual Expense Manager Survey, featuring
all charts and data, downloadable as a pdf.]
Citigroup is among the companies that implemented partial
reimbursement. Employees who book outside the designated travel agency receive
back only 80 percent of business travel costs. Reaction was "very loud"
during the first few months after the policy was implemented in October 2010,
but it was important to strategic initiatives, according to global travel
department director Mick Lee.
Citigroup is not alone. According to the survey, 24 percent
of respondents from companies with $12 million or more in annual air spend
indicated their organizations only partially reimburse for noncompliant travel.
Another 7 percent planned to implement such a tactic this year.
"There is definitely increased scrutiny on spend, and
organizations are looking more closely at what is being expensed," said a
spokesman for SumTotal Systems, which last summer acquired CyberShift and its
Necho expense system. "Companies are establishing policies where there
were none before and tightening those that were already in place."
InterplX Technologies president and CEO Chuck Buckner said
some clients have adjusted receipt requirements by payment source to drive
compliance. For costs charged to a corporate card that would prepopulate an
expense report, receipts are required only for expenses of $75 or more. For
cash or personal funds, receipts are required for $10 or more. "This may
seem like a minor deal, but it cuts down significantly on receipts needed and
encourages use of the corporate card," he added.
Spendvision product development head Andrew Whiting said his
company also is "increasingly seeing companies tightening up their
spending controls. CEOs have relaxed the reins a little [on travel], but the
importance of scrutinizing spend and making sure policies are applied and
followed has become all the more important. And, rightly so. Businesses should
have visibility of what they are spending and need to be able to run reports on
the who, where, what, why and how of all their payments."
Rising costs prompted closer review of expenses at
electronics manufacturer Jabil Circuit, according to global travel director
Jackie Bispo. At her company, accounting is reviewing out-of-policy charges
more closely and seeking approvals from higher levels.
Certain industries, notably banking and pharmaceuticals,
needed to "tighten their policies due to additional government and public
scrutiny," said Acquis Consulting Group managing partner David Kaufman.
Kaufman questioned if BTN
survey findings on the proportion of companies reviewing and tightening expense
policies were "somewhat inflated" by how buyers define the tactics. "I'm
confident most companies are thinking about their policies and give a cursory
review," he said. "However, I don't think most companies are
performing an in-depth review of their policies, such as benchmarking,
comparing to best practices and analyzing data against policy." Companies
also define tighter policies differently, he said, ranging from "changing
policy to auditing more thoroughly."
Business travel bans, higher-level approvals for any travel
and other policies "put in place during the Great Recession have been
relaxed," Kaufman said. "While I'd say policies have been tightened
significantly over the past decade, we passed the peak."
But BTN research
respondents, along with those participating in other recent studies, this year
indicated that compliance remained among their priorities, if not the top
Aberdeen Group reported that nearly 60 percent of 140 travel
or expense decision-makers responding to an online poll in January and February
cited "improve expense management processes" among their 2012
priorities. Aberdeen found that "T&E expenses account for 8 percent to
12 percent of the average organization's total budget."
"Nearly 70 percent of organizations view T&E
expense management as a strategic internal function," according to
Aberdeen senior research analyst Christopher Dwyer. "Less than 30 percent
of organizations have real-time visibility into T&E spending against
A Carlson Wagonlit Travel poll of 290 global travel managers
conducted in late 2011 also found traveler compliance as a top priority for
those based in North America. Savings on air travel, ground transportation and
hotel stays emerged as the primary focus for buyers located in other
In the BTN
research, among the 30 percent of travel buyer respondents representing
organizations with annual air expenditures of $12 million or more, nearly 12
percent said they planned to tighten expense reimbursement policies in 2012.
About 42 percent of all respondents are considered midsize with $1 million to
$12 million in air spend. The remaining 28 percent had less than $1 million in
annual air expenditures.
Some buyers are more closely scrutinizing expenses because
technology or systems integration now allow them to do so. Nearly 80 percent of
respondents from the biggest spenders and 62 percent of those from midsize
firms said their organizations had implemented an online expense solution.
Nearly 45 percent of the largest spenders indicated that their companies
recently upgraded to a new online expense reimbursement system. More than half
of all BTN survey respondents said
they had integrated their expense systems with payment, general
ledger/financial and/or human resources/organizational hierarchies. Doing so
allows the companies to report in greater detail—by business unit and perhaps
even in real time rather than monthly or quarterly.
Reporting from expense systems, integrated systems or the
latest breed of analytics is prompting some of the policy tweaks, according to
IBM Global Expense Reporting Solutions director Raymond Curatolo. "Customers
now have the data that allows them to tighten policies," he said. Of
customers on the latest version of IBM's expense system, more than 80 percent
are using new analytical capabilities, he added.
Aberdeen Group in its March expense management study found
that such practices were among those that separated the top 20 percent of
survey respondents from the rest, in terms of performance in expense report
processing costs, compliance to corporate travel policies and percentage of
business travel spend under management. The top 20 percent of companies it surveyed
had "54 percent higher likelihood to regularly report on policy compliance"
than other companies, along with 57 percent higher likelihood to leverage
end-to-end travel and expense management solutions. The top 20 percent were 50
percent more likely to "have real-time visibility into T&E spending
against budget," according to the report.
Among the largest travel buyers surveyed by BTN, 83 percent said they had integrated
their expense solutions with payment and more than three-quarters said they had
also integrated their HR/organizational hierarchy and general
ledger/financials. Nearly 40 percent of respondents in this large-spend
category said they had integrated online booking with expense and about 9
percent more said they planned to do so in 2012.
Across all respondents, 66 percent said they had integrated
payment and expense solutions, consistent with last year's survey results.
Prepopulation of card data into expense typically is a major time-savers for
employees and auditors who no longer have to enter or correct data.
"If dollars are due the employee, I don't know how they
reimburse without payment integration," said IBM's Curatolo. "Every
one of our clients has integrated to a payment component on the back end,
whether in-house, external party or through our partner."
Integration with client financial and other systems always
has been IBM's focus, Curatolo said, and demand has remained constant. But in
the midmarket, trends toward standardization of human resources and financial
systems "could be putting them in a position to ask for seamless
Spendvision's Whiting said integrations with financial,
general ledger, HR, payroll, accounts payable and other systems are so
universal among the company's client base that it now allows customers "to
either use standard interfaces" or have Spendvision manage them.
Databasics sales director Chris Harley said nearly every
deployment involves integrations with HR/organizational hierarchy or profiles,
and often extends to financial or accounting systems. Some clients have
integrated with as many as 10 internal or external systems to pull in or push
out data, he added.
Despite decades of noise about the benefits of
booking-to-expense integration, only three of 10 respondents in the BTN study said they had it in place. "It's
not that clients aren't interested," Curatolo said. "Clients are very
interested, but still in the infancy stage of actually doing it." While
IBM has a partnership with GetThere, Curatolo said the strategy is to integrate
"through the global distribution system or travel agency."
GetThere also has a partnership with SAP for three versions
of its platform and technical integrations with Infor, Insperity ExpensAble and
Chrome River, according to GetThere expense and telepresence alliances director
Liz Cox. Demand initially was slow but picked up considerably in recent months,
Concur aggressively has promoted its integrated travel and
expense platform and said more than 70 percent of new implementations have
opted for it.
Acquis' Kaufman said his firm of late has seen greater
interest in booking-to-expense integration. "This is a case where the
marketing and pricing will play into the expansion of booking and expense
integration, but companies are still figuring out how to take advantage of the
functionality," he said.
As to the challenges related to such integration, more than
half (53 percent) of buyers surveyed by BTN
cited budget as among the top two most difficult, followed by technology
incompatibility (47 percent), management support (46 percent), an inability to
justify benefits (34 percent) and identifying the person/department/company to
lead integration (33 percent).
"The challenge most businesses have is getting a
complete picture," noted Spendvision's Whiting. "It's a complex
undertaking, as most have a mix of GDS, non-GDS and traditionally booked
activity, and unique needs. We find that having a single point of integration
is the most prevalent need and challenge businesses face. The booking merely
identifies what is expected. It's the spend data that tells the customer what
actually happened—a far more compelling and valuable story."
Nearly half of BTN
survey respondents rated mobile as an expense functionality of most importance
for their travelers. InterplX's Buckner said actual usage of "mobile
platforms for entering and approving expenses is still quite low. We believe
this will grow over time."
Buckner said he also has noticed "an increased focus on
making the process simpler for end users. The purpose of automating a process
is to streamline it. If you layer in complexity and hassle, the end users will
revolt. We see organizations doing everything they can to make the process fast
and easy for the end user."
Just as long as it complies with company policy.
originally appeared in the April 2, 2012, issue of Business Travel News.