While the travel and expense industry has made strides in
easing the management and reporting of expenses while collecting valuable data,
many corporations still are not taking full advantage of technological
advances.
About 29 percent of 216 "decision-makers around the
world with responsibility for expense management" surveyed between January
and March by Forrester Research use Excel spreadsheets to manage expenses,
according to a report commissioned by American Express and released in June.
Only the use of an expense module of enterprise resource planning software (32
percent) was a more popular expense management option among the survey's
respondents.
"These statistics suggest that many firms are expending
significant internal resources to maintain their current expense management
systems, in terms of business and IT personnel, as well as software and
infrastructure support," according to the American Express report.
The survey included executives from North America, Europe
and the Asia/Pacific region from "enterprises" with at least 1,000
employees and "midmarket firms" with 100 to 999 employees.
Specifically, 34 percent of midmarket respondents indicated
that they used Excel spreadsheets, as did 24 percent of enterprise respondents.
"We run into that quite frequently, that our clients
are still using manual reimbursement systems," TCG Consulting director of
commercial payments and expense management Jim Coufal told Travel Procurement. "I think the [survey] number is low. It's
probably closer to 45 percent."
Cloud-based expense systems, in which neither hardware nor
software is housed by the client and which are accessible from multiple
touchpoints, often are heralded as the future of expense reporting. Yet, just 8
percent of enterprise respondents and 3 percent of mid- market respondents
indicated that they use a third-party cloud expense management tool.
Coufal said many companies are slow to adopt an expense
management tool because doing so entails a "process investment."
Changing systems often requires participation from a cross-section of internal
departments, including human resources, payroll, accounting, audit, legal,
travel and IT. Additionally, business rules affecting policies have to be
reworked when a new system is introduced. For example, a company might have a
policy that mandates employees attach receipts for all purchases, but then
implements an expense tool that doesn't require employees to submit a receipt
for purchases under $25. New policy language has to be created, but the
managers creating the new rules don't necessarily have the authority to make
the changes, Coufal explained.
Often, persuading senior management to embrace the "pain"
of switching to a new system is challenging, especially if executives don't see
a quantifiable return on investment.
"It's difficult to herd the cats into a focused
approach to make the change," Coufal said. "It takes time. It's an
investment, and there is ROI, but it's a three- to five-year ROI."
Similarly, expense management supplier Databasics' director
of sales, Chris Harley, said if the executives responsible for approving the
cost of switching systems don't experience any "personal pain" in
filling or approving expense reports, then they're not likely to approve the
switch. Harley said those executives tend to think, " 'We have other
priorities and other projects we're focusing on, and the expense reporting is
still getting done—it may not be optimal, but it's still getting done.' "
While the price point and pain threshold is different for
each organization, Harley suggested that if a company processes at least 30
reports per month, it makes sense to switch to an expense management tool.
Implementing a new expense management system will take more
than simply switching processes, it will take a "cultural shift,"
said Louis Berard, Aberdeen Research senior research analyst for global supply
management.
"We're seeing a clear separation between the
organizations that are the best in class and are moving toward integrated
systems and the whole idea of mobility within those systems, versus the
organizations that go back to grassroots, open Excel documents to try to track
[expenses] that way," Berard said. "It becomes very cumbersome, and
unfortunately it really slows down their ability to perform."
This report
originally appeared in the August 2013 edition of Travel Procurement.