Designing Expense Management Tools for SMEs’ Unique Needs

You can say one thing for KingsBridge’s old expense management system: Storing receipts in a shoebox certainly is simple. That’s a strong selling point for small companies like KingsBridge, a disaster recovery and business-continuity services provider. But automation has its benefits, too, and both corporations and suppliers are eyeing the opportunities.

Businesses large and small seek efficient processes that will enhance compliance and data capture. Yet, small and midsize enterprises face different obstacles, according to a PayStream Advisors survey of 200 people conducted in the fourth quarter of 2014 and first quarter of 2015.

Among respondents from large organizations (defined by PayStream as having revenue above $2 billion), 43 percent said their top struggle is an increase in expenses, and 41 percent claimed an inability to enforce corporate travel policies. Reps from SME companies (revenue below $250 million), though, emphasized lower-to-the-ground issues. Just over half cited manual data entry and inefficient processes, and 35 percent called lack of visibility into spend their biggest problem.

Automated travel and expense management solutions have improved survey respondents’ ability to enforce policies and see spend, lowered processing costs, raised employee satisfaction and accelerated reimbursement. Yet, some companies resist change. “Many believe that current processes work,” the report stated. “While this may be true, it does not mean that current processes work well.

KingsBridge, for one, recognized it was time to move on. Three consultants from the seven-employee shop travel half the year each. They spent $300,000 on air, lodging and car rental last year, stuffing their receipts into a shoebox and filing expenses into a different Excel spreadsheet for each client. “The amount of time spent individually wasn’t a massive amount,” said KingsBridge co-owner Skip Williams, who’s also one of the three frequent travelers. “When you really don’t want to do this and don’t know if you’ve missed a receipt, you’re not really all that concerned about it.”

The benefits of that front-end simplicity would wash away, however, when the accountant reconciled the books. Three to four months after the travelers had filed expense reports, she’d ask for missing receipts and explanations for expenses. Employees spent more time looking for receipts than they would have upfront and often couldn’t remember the purpose for an expense.

“It was getting to be really difficult,” Williams said. “The thing that really motivated us to find a solution that would allow us to track expenses a bit better is that last year we had [about] $65,000 of unknown expenses.” Anything above $10,000 makes filing federal taxes tricky, he said.

Payment and expense suppliers are responding to SMEs’ needs. In February, U.S. Bank reorganized its operations to establish a team to serve the middle market, said U.S. Bank head of middle-market product management Bradley Matthews. As companies graduate from the small to the middle market, U.S. Bank wants to have “the right tools and capabilities in place to serve those needs,” he said.

“Large market customers have enough negotiating power that they can pick and choose the services they need and negotiate as a stand-alone company,” he explained. “As [small companies] grow into the middle-market space, sometimes they don’t know all the services they need or where best to get them, so there’s an opportunity for us to provide some consultation and bring in new partners to help solve various needs for them.”

Last year, U.S. Bank also extended its FlexPerks Rewards program to commercial card clients, allowing them to pool points not just for individual employees but also at the corporate level. BMO in January allowed Diners Club International clients to pool points for company use, and Amex launched a similar program for small businesses in 2013.

Williams came across T&E management solution Trippeo in December 2014. The system, which officially launched in January, automatically imports credit card charges into reports, and the mobile app allows users to photograph receipts and link them to relevant charges. He tried the solution for a month before implementing it fully in March.

“It was a godsend,” he said of the solution. He liked that Trippeo, like KingsBridge, is a small business based in Canada, which eases KingsBridge’s dealings in both Canadian and U.S. dollars. “The hardest part [of our expense management] is that we deal with cross currencies, and that’s a humongous pain in the butt,” Williams explained. Williams and Trippeo now are working on a feature to allow KingsBridge to run client-specific expense reports.

This report originally appeared in the June 1, 2015, issue of Business Travel News.